New Delhi [India], July 23 : Former senior diplomat Mahesh Sachdev on Tuesday said that the most significant outcome of Prime Minister Narendra Modi's visit to the United Kingdom would be the signing of a bilateral Free Trade Agreement (FTA), which could substantially boost trade and investment between the two nations.
"I'd like to emphasise that the seminal point of the visit is signing of the bilateral free trade agreement which would, cover very substantial part of bilateral trade and free them from high tariffs or other restrictions," Sachdev said.
"It would also have an impact on our services sector because they are intertwined with the merchandise goods as well. Bilateral trade was USD 55 billion last year, last financial year and it was nearly balanced. UK's own expectation is that this trade would rise by about two-third, between now and 2040."
He further added that these projections might be on the lower side and actual growth could exceed them.
"These expectations may be understated. It may happen much faster than otherwise," he said, adding, "The two countries have historic ties to colonial legacy and other interactions, relevant to note that India overtook Britain as the world's 5th largest economy three years ago."
Sachdev said, "Dynamism of Indian economy, our growing middle class, largest population of the world is what attracts, countries like the United Kingdom which have left Brexit. They have been looking for anchoring their foreign trade with other countries."
"India's profile matches what the UK wishes to have as a big market, and we on the other hand have large expectations from the UK as not only as a market but also as a source of technology as a source of transit goods because plenty of trade goes to Europe, Northern Ireland, Irish Republic, etc from UK.", he added, "It would also be interesting to watch how does this treaty impact on bilateral investment scenario....Its overall already very substantive relationship but can go much deeper through this agreement."
On the political and strategic aspect of the relationship, Sachdev pointed out that the agreement could influence the UK's approach towards India.
"About non-economic part one should add that UK has often acted in a whimsical manner trying to divide and rule India with its neighbours, trying to play it both ways between India and China, act as a bridge between various parties such as the EU and United States," Sachdev said.
"I believe that such a large agreement with significant fallout would anchor UK's policies towards India and would focus its attention on leveraging the opportunities in the country and therefore impact on the bilateral ties.", he added.
"Reflecting on the historical context of the ties, he added: "India-UK ties date back to the East India Company, where trade was the main motive, 5 centuries ago, but it went on to take other forms."
"I think we are at a different time and we are quite vigilant and independent and a strong country, to enable both sides to reap early harvests of economic integration.", Sachdev concluded.
PM Modi will embark on his two-nation tour of the UK and the Maldives from July 23 to July 26, the MEA had said on Sunday.
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