India actively mull to sign a separate preferential pact with UK after Brexit

The Indian commerce ministry is actively considering starting a dialogue with United Kingdom for a preferential trade agreement, one that brings significant benefit to the country’s textile sector, after United Kingdom deciding to exit the European Union (EU), besides ongoing negotiations for a free trade agreement with that trade and economic bloc, said Union textile secretary Rashmi Verma.

Verma said that with the Brexit verdict, this is the right time to negotiate given that the country is also a bit vulnerable at this point. It is very much under discussion and the Ministry of Trade and Commerce is looking at a possibility of this kind of a dialogue.

Textiles are among the main exports to the United Kingdom from India besides machinery, petroleum products, leather, gems and jewellery, among others. After Mauritius and Singapore, the United Kingdom is the third-largest investor into India with cumulative foreign direct equity investments of $23.1 billion from April 2000 to March 2015. This accounts for eight per cent of the total FDI inflows into India.

Verma said that the government is also simultaneously making a lot of effort at clinching a free trade agreement with the EU, giving it top priority, with it being one of India’s biggest markets especially for textiles.

They need to also take a fresh look at free trade agreements with about 15 other countries, including Japan. These were signed a long time ago and need to renegotiate these to see that there is an advantage to India’s textile sector. The focus has to change given the huge employment potential in the sector.

With the recent clearing a special package for the textiles sector, with an aim to tap China’s receding share in the market, Union cabinet members noted that there was a need for trade agreements with Britain and EU.

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