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Brexit: EU steals march in race for India trade deal as Johnson announces ‘enhanced partnership’

Brussels and Delhi tipped to open talks on free trade agreement within days – while UK admits ‘shared intent to begin work’ only

Rob Merrick
Deputy Political Editor
Tuesday 04 May 2021 09:35 BST
Trade deals with India and the US are the most prized by Brexit-backers
Trade deals with India and the US are the most prized by Brexit-backers (EPA)

The EU is poised to steal a march on the UK in the hunt for a post-Brexit trade deal with India, as Boris Johnson announced only an “enhanced partnership” with Delhi.

Brussels hailed “clear momentum”, with talks on a free trade agreement to be confirmed as early as Saturday, threatening to put the UK in the slow lane in the race for negotiations.

The prime minister pledged that 6,500 jobs would be created in the UK through trade and investment deals with India, centred on health, technology and vaccine development.

The announcement comes ahead of a virtual meeting with Narendra Modi, the Indian prime minister, on Tuesday – after a dramatic Covid-19 surge forced the cancellation of Mr Johnson’s trade trip.

But the “enhanced partnership” seems certain to be trumped by talks on a fully fledged trade deal between the EU and India, to be confirmed within days.

Those negotiations were suspended in 2013 after disagreements over tariff rules for car parts and free-movement rights for professionals, but resuming them has been a priority for both sides.

The move was discussed in a call on Monday between Ursula von der Leyen, the European Commission president, and Mr Modi, according to a Commission official.

“There is clear momentum to strengthen our strategic relations on trade, digital, climate change and multilateralism,” Ms Von der Leyen wrote on Twitter. “I’m encouraged by the prospect of intensifying our trade and investment relations.”

Trade deals with India and the United States are the priorities for the government, Brexit supporters having once promised they would be delivered easily and quickly.

But with US president Joe Biden also stalling on talks, the UK has been forced to focus on deals with far-flung Australia and New Zealand, despite those agreements offering virtually no economic gain.

“The prime minister can talk in platitudes about future trade targets, but we’re yet to see the influx of post-Brexit free trade agreements that was promised,” said Sarah Olney, the Liberal Democrat trade spokesperson.

“The same can be said of the trade relationship with India at this stage, and it’s extremely doubtful that a full FTA is on the cards.”

Naomi Smith, chief executive of the campaign group Best for Britain, said: “We know historically that India starts rather more trade talks than it finishes, so this promise to negotiate a comprehensive UK-India trade agreement should be taken with a large pinch of salt.”

The UK and India are unveiling a package containing more than £533m of new Indian investment in the UK, with £200m of the deals supporting low carbon growth.

It includes a £240m investment by the Serum Institute into its vaccine business, the firm having already started UK trials of a one-dose nasal vaccine for coronavirus.

British export deals with India will be worth more than £446m, and include robotic surgical equipment to be introduced in Indian hospitals, according to No 10. It is expected that more than 400 jobs will be created in the UK as a result.

Mr Johnson said: “Like every aspect of the UK-India relationship, the economic links between our countries make our people stronger and safer.

“In the next decade ... we will double the value of our trading partnership with India and take the relationship between our two countries to new highs.”

The two leaders are also announcing a “shared intent to begin work towards a comprehensive free trade agreement” that it is hoped will enable these targets to be met.

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