India-UK trade deal: Focus on what is acceptable to both countries, says Piyush Goyal

Negotiations with the UK started on January 13 last year with an aim to boost bilateral trade and investments. The bilateral trade between the two countries increased to USD 17.5 billion in 2021-22 compared to USD 13.2 billion in 2020-21. India's exports stood at USD 10.5 billion in 2021-22, while imports were USD 7 billion.

"With UK, our approach is let's focus on what is acceptable to both the countries and let us not allow sensitive issues to scuttle our discussions," Goyal told reporters here.

When asked about a statement of a UK official that granting more students visas for India is not part of this agreement, Goyal said: "Have you ever heard of student visas being part of FTA? How many students go there (UK) to study? It's never a part of an FTA”.

British trade minister Kemi Badenoch, who is in-charge of the negotiations, recently stated that the trade agreement is expected to be clinched this year, but it won't involve any boost of free movement visa offers for Indians.

In an interview with 'The Times' recently, the UK Secretary of State for Trade also ruled out any major similarities between the FTA the UK struck with Australia post Brexit and the proposed deal with India.

Goyal said FTAs are never negotiated either in newspaper articles, news conferences or in public functions, and these agreements are “serious” functions that happened amongst officials and at higher political levels also discussed when required.

“That's hardcore negotiations and it has to be a win-win for both countries,” he added.

Talking about the proposed trade deal with Canada, the commerce minister said that with Canada, India is looking at an early harvest agreement, which is called an early progress trade agreement.

In this, "we are hoping to capture the low hanging fruits, so that the businesses can start enjoying the fruits faster and when people start seeing the benefits," he added.

Replying to a query on India's decision to opt out from the trade pillar of the 14-member Indo-Pacific Economic Framework (IPEF), Goyal said if India would find it in the interest of the country, it will be happy to join that pillar.

India opted out from the trade pillar "because we do not know the final contours, we don't know whether there are any binding commitments, we don't know whether there will be any restrictions which can hurt our manufacturing or hurt our economy.

"So, until we see exactly what are the contours that are there and what are the benefits that are there, until that time we have said, we will observe what you (13 members of the IPEF) all are doing,” he said.

India has not yet opted for it, as it is waiting to see what the final contours of this trade pillar would be and what it will get, he added.

The IPEF was launched jointly by the US and other partner countries of the Indo-Pacific region on May 23 in Tokyo. The 14 IPEF partners represent 40 percent of global GDP and 28 percent of global goods and services trade.

The framework is structured around four pillars relating to trade, supply chains, clean economy, and fair economy. India has joined three pillars - supply chains, clean economy, and fair economy.

India will host the next special negotiation round of the Indo-Pacific Economic Framework for Prosperity (IPEF) from February 8-11 next year.

On the PM Gati Shakti initiative, the minister said that besides efficient planning of roads and railways, PM Gati Shakti portal is being used for unique ideas.

Citing examples, he said the portal is helpful in finalising locations for the proposed PM Mitra (Mega Integrated Textile Region and Apparel) parks.

It is also used to match the BIS (Bureau of Indian Standards) and FSSAI (Food Safety and Standards Authority of India) labs with the industries.

“We have mapped all the labs of the country on the PM Gati Shakti platform…So if the cement industry is in one place, cement testing should be there, and not 500 km away,” he said adding the platform is helping social sectors also.

He added that give lakh fair price shops have also been mapped and now “we are mapping” number of transactions on each shop, “so we will be able to know which are the shops where nobody goes, we can remove some of them and which are the shops which are overloaded”.

Goyal was here to participate in the inaugural session of the B20 India Inception Meeting here, organised by industry chamber CII.

The country's services exports are doing “extremely well” and going by the current trend these outbound shipments would register about 20 percent growth in this fiscal and cross the USD 300 billion target despite global economic uncertainties, Commerce and Industry Minister Piyush Goyal has said.

He said that on the merchandise front also, exports are so far registering healthy growth despite the world being under recession, huge inflationary pressure, and overstocking of various commodities.

With all these stresses, where every global leader is talking of “very” tough times, India's exports rose 9 percent year-on-year during April-December 2022-23.

“On services though, we have done extremely well. On services we are probably going to do at least a 20 percent growth and by the current trends, we will exceed the target of USD 300 billion this year.

“So, all in all, it will be a very very satisfying year, given the global headwinds and the stress that is reported from almost every part of the world,” he told reporters here, adding the government's structural reforms and steps like Make in India and Digital India are yielding fruits.

During April-December 2022-23, overall exports rose 9 percent to USD 332.76 billion while imports increased 24.96 percent to USD 551.7 billion. Trade deficit during the nine-month period widened to USD 218.94 billion as against USD 136.45 billion in April-December 2021-22. In last fiscal year, the country's merchandise shipments touched an all-time high of USD 422 billion.

According to the data of the commerce ministry, the estimated value of services export in April-December 2022 is USD 235.81 billion as compared to USD 184.65 billion in the year-ago period. In 2021-22, these exports touched an all-time high of USD 254 billion.

India's exports contracted 12.2 percent to USD 34.48 billion in December 2022, mainly due to global headwinds, and the trade deficit widened to USD 23.76 billion during the same period.

The minister said individual months have seen some ups and downs, but overall, the exports sector is doing well so far despite global economic uncertainties.

“Clearly, we cannot sustain that kind of momentum given the difficult times, but we are on it. Here also, I have spent three hours with export promotion councils on video conferencing. All of them have committed to me that they will be pushing this quarter for maintaining this (exports growth) momentum to the best of their abilities. But yes, it is not an easy time, it is a tough time. But we still feel confident that we will be able to maintain (growth momentum), if not do better than last year,” Goyal said.

If the US, Europe and China pick up a little bit, then “we may actually” grow this year as well, he added.

Asked if the exporting community expects some support measures, the minister said the government is always there for the sector if they face any problem.

Replying to a query whether the government would hike customs duty on certain products to cut imports of non-essential goods, he said India does not make any knee-jerk decisions and it believes in stable and predictable policies in the long run.

“Our effort is more to develop the manufacturing base of India, which is why the PLI (production linked incentive) scheme is so successful and popular,” he added.

Goyal was here to participate in the inaugural session of the B20 India Inception Meeting here, organised by industry chamber CII.

.

.