Prime Minister announces £1bn trade deals with India

Prime Minister Boris Johnson has announced new trade and investment deals with India worth £1bn, in a move that aims to secure a future full trade agreement between the two countries.

It includes more than £533m of new investment from India into the UK, which is expected to create about 6,000 jobs.

Downing Street said the new partnership would “pave the way” for a future UK-India Free Trade Agreement, post-Brexit.

The countries have also struck a deal allowing thousands of young adults to work and live in each other’s countries for two years.

The Home Office said the scheme for 18 to 30-year-old professionals would allow “the brightest and best” to come to the UK based on “skills and talent”.

Meanwhile, the long-running dispute over aviation subsidies between the UK, EU and US could be resolved by July, according to International Trade Secretary Liz Truss.

The Prime Minister welcomed the new £1bn India deal. He said: “The economic links between our countries make our people stronger and safer.”

The deal, announced ahead of a virtual meeting held on 4 May with India’s Prime Minister Narendra Modi, includes a £240m investment by the Serum Institute of India, which will support clinical trials, research and possibly the manufacturing of vaccines.

Serum has already started phase one trials in the UK of a one-dose nasal vaccine for coronavirus, in partnership with Codagenix.

Indian investment deals will create 1,000 new UK jobs each at health and tech firms Infosys, HCL Technologies and Mphasis.

Some 667 UK jobs will be created at Q-Rich Creations, 500 jobs at Wipro and 465 at 12 Agro.

“Each and every one of the more than 6,500 jobs we have announced today will help families and communities build back from coronavirus and boost the British and Indian economies,” said Mr Johnson.

Trade minister Truss said the jobs would be created “within the next year or so”.

She said those commitments were “very different” from a free-trade deal, which the two governments will start negotiating on this autumn. Discussions will include lowering tariff barriers and new agreements on “digital and data”.

Trade between the UK and India is worth about £23bn per year, and the Government hopes to double that by 2030.

“What we need to do is get the huge tariffs removed on products like whisky, which is over 100 per cent; cars, which is over 100 per cent – that is where the real opportunities lie for us,” she said.

The dispute over state aid provided by European Governments and the White House to Airbus and Boeing dates back to 2004, resulting in a tit-for-tat tariff dispute when President Donald Trump was in office between 2016 and 2020.

Ms Truss said the UK and US were working on a draft text of an agreement, with negotiations focused on “subsidy disciplines” in the aerospace industry. The EU has also claimed progress in its own negotiations with the US.

The dispute between the US and EU – including the UK before it completed its split from the trade bloc – ramped up under President Trump, who used a WTO ruling in the US’s favour to impose $7.5 billion of tariffs a year on EU exports.

Although the UK is no longer a member of the EU it is still affected by the dispute as it is one of the four partner nations behind Airbus.  The temporary deal gives a four-month window to achieve a permanent resolution on the issue.

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Posted in Business, News.