IEA-东方承诺：评估英印贸易的未来（英文）-2021.4-16页_489kb

UK-India Trade Deal: A Strategic and Economic Opportunity

Core Content

This briefing paper explores the potential for a UK-India trade deal in the context of growing geopolitical and economic alignment between the two nations. It highlights the opportunities and challenges that lie ahead, emphasizing the importance of property rights protection, market competition, and open trade for both countries to achieve mutual economic benefits.

Main Points

India at a Crossroads

• India has moved away from its non-aligned past and is now an aligned state, but its alignment is not yet fully realized in terms of trade and market openness.
• India faces a critical decision: align with pro-competitive nations like the UK, US, and CPTPP members or continue to align with China, which has a different regulatory and economic model.
• India's relationship with China is strained, with military tensions and geopolitical competition in the Indian Ocean region.
• There are opportunities for India to open up its markets, particularly in services, agriculture, and education, to benefit from UK trade agreements.

Potential for a UK-India Trade Deal

• A trade deal between the UK and India could significantly boost bilateral trade, which has stagnated in recent years.
• The UK's financial services, legal services, food and drink, and education sectors stand to gain from an FTA.
• The UK is in a unique position to lead in securing an FTA with India, given its recent accession to the CPTPP and its Enhanced Trade Partnership (ETP) with India.
• The deal would have strong geopolitical implications, helping to counterbalance China's influence in the Indo-Pacific region.
• The UK and India have both expressed interest in a comprehensive FTA, with the UK's offensive interests including access to Indian services markets and India's seeking access to UK services and agricultural markets.

India's Challenges: Decline in Protection of Property and Investor Rights

• India has been undermining investor protections and property rights, which are crucial for economic growth and attracting foreign investment.
• The Devas vs. Antrix case illustrates the Indian government's disregard for international treaties and arbitration rulings, with over $1.6 billion in compensation owed.
• Other cases, such as Cairn Energy and Vodafone, further highlight India's pattern of breaching BITs and retroactively applying laws to target foreign investors.
• These actions have created a negative market signal and undermined India's reputation as a reliable investment destination.

What Can Be Accomplished in April?

• The UK Prime Minister, Boris Johnson, has the opportunity to push for a UK-India trade deal in April 2021.
• He can emphasize the importance of protecting investor rights and respecting the rule of law in FTA negotiations.
• A successful deal would not only benefit the UK's industries but also signal India's commitment to opening up its markets and aligning with global trade norms.
• The UK can use its trade openness and soft power to achieve what others have not, potentially shifting India's alignment from China to pro-competitive nations.

Key Information

• Current Bilateral Trade: UK-India goods trade is valued at $15.7 billion, while services trade is valued at $18.9 billion.
• India's Offensive Interests: Mode 4 services (movement of natural persons), agricultural SPS compliance, student visas, and reduced apparel and textile tariffs.
• UK's Offensive Interests: Access to Indian services markets, especially in financial and legal services, and reduced tariffs on Scotch whisky.
• India's Defensive Interests: Legal services regulations, including the Indian Bar rules.
• UK's Defensive Interests: Limited, but include agricultural standards for UK-produced goods.
• Geopolitical Significance: The UK, US, and CPTPP members form a coalition that could significantly influence the Indo-Pacific region.
• India's Reforms: Some reforms, such as GST and agricultural/labor reforms, have been initiated, but more are needed to improve its global standing.

Conclusion

The UK-India trade deal represents a strategic opportunity to foster economic growth and geopolitical alignment. However, it is contingent on India's commitment to protecting property rights, upholding the rule of law, and embracing market-friendly reforms. The UK can play a pivotal role in encouraging these changes, which would not only benefit its own industries but also position India as a more attractive partner in the global economy.