UK and India Announce New Trade and Investment Deals Ahead of PMs’ Meeting
By Bob Savic, Advisor to Dezan Shira & Associates
On Tuesday, May 4, 2021, the UK’s Prime Minister Boris Johnson announced £1 billion in new trade and investment deals ahead of talks today with India’s Prime Minister Narendra Modi. The meeting between the two leaders will look to formalize the enhanced economic partnership that was set out earlier in the year during high level intergovernmental talks (see India, UK Agree To Immediate ‘Enhanced Trade Partnership).
Johnson and Modi will also look to discuss cooperation on climate, defense, health, and technology. Today’s meeting will be held online as the UK’s Prime Minister has had to cancel meetings set for January and April this year due to concerns over the coronavirus pandemic in the UK and India, respectively.
India ramps up investment into the UK
Last week, Johnson spoke with Indian business leaders from companies, such as Infosys and HCL, to discuss the growing importance of the economic relationship between the UK and India amid plans to accommodate more investment from Indian companies.
As a starting point, the newly announced economic package contains over £533 million of Indian investments into the UK. These will mainly involve funds for the health and technology sectors. However, about £200 million of that amount will be channeled into also supporting low carbon growth.
The new package also incorporates up to £240 million in funding by the Serum Institute of India (SII) for their vaccine business in the UK. This will involve setting up a UK-based management and sales office, which is expected to generate new business worth over $1 billion in coming years.
SII’s investment will support clinical trials, research & development, and possible manufacturing of vaccines. SII has already started phase one trials in the UK for a single-dose nasal coronavirus vaccine in partnership with Codagenix INC.
The various new direct investments (or new job positions) announced by India today include as follows:
- Infosys – 1,000 new job positions
- HCL Technologies – 1,000 new job positions
- Mastek – 357 new job positions
- TVS Motors-Norton – 89 new job positions
- Prime Focus Technologies – 70 new job positions
- MPhasis – new investment of £35 million
- Q-Rich Creations – new investment of £54 million
- Wipro – new investment of £16 million
- I2 Agro – new investment of £30 million
- Sterlite Technologies – new investment of £15 million
- Global Gene Corp – new investment of £59 million
- SNVA Ventures – new investment of £10 million
- Serum Institute – new investment of £240 million
- Skillmine – new investment of £11 million
- CtrlS Data Centers – new investment of £10 million
- Que Processing Services – new investment of £10 million
- Cron Systems – new investment of £20 million
- Route Mobile – new investment of £20 million
- Goila Butter Chicken – new investment of £3 million
New UK export deals with India
British businesses have also secured new export deals with India valued at over £446 million, which will create over 400 UK-based jobs.
Among those will be CMR Surgical’s exports of its next-generation ‘Versius’ surgical robotic system. The technology, which enables surgeons to perform minimal access surgery, will be introduced to hospitals across India. The export deal is worth £200 million, resulting in 100 new UK-based jobs.
Trade between the UK and India is already worth around £23 billion a year and supports over half a million UK jobs.
The Enhanced Trade Partnership agreed today will set the target of doubling the current value of UK-India trade, by 2030. It is being viewed by both sides as a declaration of their shared intent to begin work towards a comprehensive Free Trade Agreement (FTA). India’s US$2.6 trillion economy, at the end of 2020, is considered the largest market to which the UK has committed to negotiating a trade deal with to date.
Trade barriers addressed between Liz Truss, the UK’s International Trade Secretary and Shri Piyush Goyal, India’s Minister for Commerce and Industry, in the earlier round of talks over the Enhanced Trade Partnership include:
- Lifting restrictions to enable fruit producers across the UK to export British apples, pears, and quince to India for the first time.
- Securing improved access for medical devices through the acceptance of UK Certificates of Free Sale in India and removing the requirement for additional accreditation of UK medical devices when exporting to the Indian market before they can be sold.
- Committing to deepening co-operation in educational services and concluding work on the recognition of UK higher education qualifications, an outcome expected to encourage an increase in student flows, skills transfer, and knowledge sharing between the UK and India.
- Committing to working on removing barriers in the Indian legal services sector. This is anticipated support in preventing UK lawyers from practicing international and foreign law in India, a step that could significantly increase UK legal services exports and UK legal services imports from India.
In support of a new free trade deal, Boris Johnson stated:
“In the decade ahead, with the help of the new Partnership signed today and a comprehensive Free Trade Agreement, we will double the value of our trading partnership with India and take the relationship between our two countries to new highs.”
The Enhanced Trade Partnership agreed today creates immediate opportunities for British businesses in India across industries including food and drink, life sciences and the service sector. Non-tariff barriers on fruit and medical devices will be lowered – allowing British businesses to export more of their products to India and boosting UK growth and jobs.
It also commits both sides to addressing immediate market access barriers as well as continuing to seek further opportunities as we negotiate an FTA, benefiting businesses and consumers in both countries.
A future UK-India trade deal will support hundreds of thousands of jobs and boost the economies of both the UK and India by potentially lowering or removing current tariffs such as those of up to 150% on whisky and up to 125% on automotives as well as on other British products. It would also create huge benefits for British services – 4 out of 5 of India’s fastest-growing imports are for services like IP and telecommunications.”
The range of new UK export deals announced today include:
- Morningside Pharmaceuticals researching, developing and licensing new pharma products.
- Polymateria’s biotransformation technology, which enables plastics to become fully bio-degradable, in a deal worth £75 million in UK exports over the next five years.
- CMR surgical – deal worth £200 million creating 100 new UK jobs.
- Kloudpad – critical hardware and software bespoke data centers worth £15 million.
- Vidrona drone surveying equipment and AI technology.
- KIGG systems – smart meter test benches for electricity distribution companies.
- CyanConnode – deal worth £18 million creating 30 new UK jobs.
- GoZero Mobility – deal worth £3.2 million for e-bicycles.
- Agvesto – deal worth £3 million.
- Revolut expansion into India creating 60 UK jobs.
- CDE Asia – deal worth £500,000.
- Bio Products Laboratory – biopharmaceutical finished products for rare bleeding disorders worth £62 million.
- Kwalee British video game producer expansion in India creating 25 new UK jobs.
- Shorts TV digital entertainment platform – forecasting exports worth £8 million.
- Clancy Global – a One Evolve Ecosystem worth £2.5 million.
- Astropol – colour and additive solutions for the vinyl, non-vinyl and associated additive industries worth £12 million.
- Surgease – a deal worth £14.9 million and creating 100 new UK jobs.
- Oxvent – deal worth £20 million.
- Eagle Genomics – deal worth £12 million and creating 165 UK jobs.
- BP – partnership with Infosys to decarbonise Infosys’ 11 campuses across India.
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