The trip to India to attend the G20 summit this week is doubly important for the British Prime Minister. First for the emotional reason, because he traveled to the land where his grandparents migrated (in Africa) and where his wife, Akshata Murthy, was born, accompanying you on the journey. And secondly, to finalize the long-awaited free trade agreement with India, which will be the biggest prize after Brexit. A meeting between Rishi Sunak and Indian Prime Minister Narendra Modi is planned before the summit. So far the United Kingdom has only been able to close agreements with New Zealand, Australia and the transpacific market. The great agreement, with the United States, was closed by Johnson and Trump, but with the arrival of Biden and his Irish relations and pro-Europeanism, it stopped. And still stuck.
The free market agreement in India It is now the most valued because of the importance it will have in an emerging, fast-growing market of 1.4 billion potential consumers. (compared to 500 million in the European Union-EU). If it closes, the UK will become the first European country to sign a free trade agreement with India. Advocates say a deal would be a historic moment. in the post-Brexit era. Its detractors argue that the overall benefits will remain marginal.
India is currently the UK’s 15th largest trading partner and accounts for just 1.7% of the UK’s total trade. Trade between the two countries is 36 billion pounds (42 billion euros). The Government estimates that tariff cuts alone could boost UK GDP by 0.05% by 2035, while a more comprehensive agreement would see it grow by 0.22% over the same period. It will also be possible to increase the country’s payrolls by 3,000 million pounds (about 3,600 million euros).
This agreement is part of the British post-Brexit strategy, called “Pivot to the Indo-Pacific.” The Indo-Pacific region is a geopolitical area consisting of two zones of the Indian Ocean and the Pacific Ocean and from the west coast of the United States to the west coast of India and has twenty-four countries, including the United States, Australia, Japan and New Zealand, in addition to India. It represents 50% of the world’s GDP. Negotiations with India were initiated by Boris Johnson at the beginning of 2022. Since then, specific agreements have been closed between the two countries, such as those in the aerospace and automotive sectors.
But there are tradeoffs for that the difference in the market between the two countries. It will give British companies access to a market of 1.4 billion people, relative to the British market, which is 70 million people for Indian companies such as those of her father-in-law and the prime minister’s own wife’s companies, which already have problems with the British treasury that almost cost her husband his career.
A trade-off is that the deal means opening the doors to Indian immigration. From the prime minister’s office they assured that it will not involve changing the immigration policy. The United Kingdom will ban foreign students from bringing dependent family members with them from January 2024, as a move to control immigration. According to the Government, about 136,000 visas will be issued to dependents of students in 2022, eight times more than 16,000 in 2019. The majority are Indian and Chinese students.
Notice that the agreement is good. From India they said it was closed. From the United Kingdom they are more cautious. No deadlines have been set, but they believe it could be closed before the end of the year. A new round of talks is scheduled for the end of September. And tentative arrangements are being made for Sunak to return to India next month to sign the final deal.
Another question is what kind of treaty they will conclude. They say they are a long way from closing a deep deal and It is suggested that a small but quick one can be closed, which is easy for the two leaders because they have elections next year.. Modi is the clear favorite in India. Sunak is far behind in the polls in the United Kingdom. This deal will give a lot of credibility to Sunak who, since coming to power in October, has unblocked relations with the EU by closing the necessary new agreement for the Northern Ireland border and will once again be part of of Horizon and Copernicus scientist. program.
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The two leaders will meet in a meeting before the G20 summit, Sunak is also expected to try to influence Modi to take a stronger stance against Putin. India continues to buy oil from Russia and aligns itself with Putin. The trip to India also represents a return to the origins, to the roots of the Sunaks. Parents are of Indian descent. Sunak’s grandparents migrated in the late 1940s, after India’s independence, in Tanganyika (now Tanzania) and the Kenya Protectorate (now Kenya).
Akshata Murthy was born in the south eastern town of Hubbali in India. She is the daughter of the sixth richest man in the country and has shares in her father’s companies and a fashion company, her great passion. Ironically, despite being one of the richest men in the United Kingdom, He was brought up in absolute austerity because his father was poor when he had him. and until he grew up he became a multimillionaire.