The United Kingdom and India are nearing the finalisation of a long-awaited free trade agreement (FTA), according to senior Indian diplomat Nidhi Tripathi.
Speaking at the British Chambers of Commerce trade conference in London, Tripathi, India’s economic minister at the High Commission, expressed confidence in the deal’s imminent completion, Bloomberg reports. “We are very close, and this agreement will be a game-changer for both of us,” she said, emphasising the benefits for service providers in both countries.
According to Neeraj Kanwar, Vice Chair and Managing Director of the India-based tyre giant Apollo Tyres, the UK-India FTA presents a significant opportunity to strengthen economic ties, encourage innovation, and promote sustainable growth.
In an interview with Asian Voice, he discusses more about what the agreement can mean for both India and the UK.
1. How do you see the UK-India FTA strengthening trade and investment ties between the two nations? What strategic advantages does this agreement offer to Indian manufacturers like Apollo Tyres in the UK market?
The UK-India Free Trade Agreement (FTA) holds significant promise for enhancing trade and investment between the two nations. For Indian manufacturers like Apollo Tyres, which has a substantial sales and marketing presence in the UK, the FTA offers several advantages.
Post-Brexit, a greater emphasis has been placed on bilateral relations from a UK point of view. The long-standing shared history between the two countries and India’s strong economic growth in contemporary times, make a compelling case for the world’s fifth and sixth-largest economies to work together in advancing the global economy.
The reduction or elimination of tariffs can make Indian products more competitive in the UK market, potentially increasing sales and market share, especially in the current global trade climate. Simplified regulatory alignments can streamline operations, reduce costs, and improve supply chain efficiency. The FTA can facilitate increased investments in the UK, enabling companies to expand their footprint and collaborate more effectively with local partners.
Apollo Tyres has strategically positioned itself in the UK by establishing its global marketing function and investing in a Digital Innovation Hub in London. This hub collaborates with scientists from the University of Glasgow to develop smart manufacturing solutions and leverage technologies like Artificial Intelligence and Machine Learning to enhance efficiencies. The FTA is expected to bolster such initiatives further by facilitating smoother knowledge transfer and fostering an environment conducive to innovation.
2. In what ways could the FTA enhance the competitiveness of Indian businesses in the UK and vice versa?
The FTA can enhance competitiveness by aligning product standards and can reduce compliance costs, allowing Indian businesses to bring products to the UK market more swiftly and vice versa. Eased visa regulations can enable the movement of skilled professionals and students between countries, fostering a diverse talent pool and encouraging cross-border collaborations. The agreement can pave the way for joint ventures and partnerships in sectors such as tech, financial and professional services, media and education, combining the strengths of businesses from both nations to innovate and capture new markets.
In addition, and as with Apollo’s case, the UK, strengthened by its geographical location, coupled with its advanced infrastructure, its global media presence and one of the best-in-class service sectors, can be a strong focal point for Indian businesses with a global presence.
Apollo Tyres exemplifies this by establishing its global strategic functions in London, leveraging the country's strategic location to manage operations across Asia, Europe, and the Americas.
3. Beyond trade, how do you see the FTA facilitating knowledge transfer, R&D collaborations, and skill exchange between the two economies?
By fostering partnerships between academic institutions and industries, the FTA can promote joint initiatives that benefit both economies.
As of last year, approximately 136,921 Indian students were enrolled in UK institutions, marking a 294% increase since 2019. Further, the Office for National Statistics reported that around240,000 Indian nationals immigrated to the UK, with 116,000 arriving for work-related reasons. Indian professionals are notably employed in high-skilled occupations, arriving on skilled-worker visas, particularly in sectors like information technology, engineering, and healthcare. They often have high median earnings, reflecting their substantial contribution to the economy.
Furthermore, sharing best practices and technological advancements can drive efficiency and growth in various sectors. We have employees in the UK working across six business functions, supporting our global corporate and marketing arms.
Apollo Tyres' Digital Innovation Hub in London serves as a prime example of such collaboration. The hub works in tandem with a similar innovation hub in Hyderabad, India, where we seamlessly collaborate on new innovations in the automotive manufacturing sectors, driving Industry 4.0 across the world. The FTA can encourage more such partnerships, leading to shared growth and innovation.
4. Looking ahead, what should businesses like Apollo Tyres focus on to maximise opportunities from a potential UK-India FTA?
To fully leverage the benefits of the FTA, businesses should keep abreast of negotiation developments and understand the specific provisions that impact their sector. Companies should be participating in industry consultations and providing feedback to policymakers in both countries to ensure that the agreement addresses sector-specific needs. Businesses should also be prepared to meet any new regulatory requirements and consider investing in certifications that facilitate smoother market access.
5. Are there any specific regulatory or compliance hurdles that could impact the automotive and tyre industries?
While Apollo Tyres does not manufacture its products in the UK, certain regulatory and compliance hurdles may arise even with an FTA in place. Determining the origin of products to qualify for tariff concessions can be complex, especially for industries with intricate supply chains like automotive and tyres. Ensuring robust protection for designs, trademarks, and patents is crucial to safeguarding innovations and maintaining a competitive edge.
