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Britain and India have “fired the starting gun” on a full trade agreement, with the announcement on Tuesday of a preliminary deal worth £1 billion.
Boris Johnson and Indian premier Narendra Modi have secured fresh cooperation and investments that will help create 6,500 jobs in the UK.
The two prime ministers will host a virtual meeting Tuesday afternoon, following the cancellation of Mr Johnson’s trip to New Delhi last month amid soaring Covid cases. Trade, health, climate change and defence are set to be discussed.
They will unveil an enhanced trade partnership that includes £533 million of new Indian investment into Britain, focused on the health and technology sectors. More than a third of the cash will support low carbon growth, underscoring Mr Johnson’s green industrial agenda.
The Serum Institute of India (SII), the world’s largest vaccine manufacturer, is set to invest £240 million in its jabs business in the UK, including a new sales office. It will support clinical trials, research and development and potentially vaccine manufacturing.
The SII has already started phase one trials in the UK of a one-dose nasal vaccine for coronavirus, in partnership with Codagenix INC.
A UK government source said Mr Johnson and Mr Modi were “firing the starting gun on a full free trade agreement (FTA)” and added: “Negotiations proper will launch in the autumn.”
Welcoming the partnership, the Prime Minister said Monday night: “Like every aspect of the UK-India relationship, the economic links between our countries make our people stronger and safer.”
He said the thousands of jobs created by the partnership “will help families and communities build back from coronavirus” and nurture both nations’ economies.
By 2030, Britain and India aim to double the value of their trading partnership, Mr Johnson added. It is currently worth £23 billion a year and supports more than half a million jobs.
The agreement will create new opportunities for British businesses in the Indian food and drink, life sciences and services sectors.
Non-tariff barriers on fruit and medical devices will be slashed, in a boost to British exports.
UK medical technology company CMR Surgical, which makes a sophisticated robotic system that assists doctors performing minimal access surgery, has secured an export deal worth £200 million, which will create 100 new UK jobs.
The deal also commits both sides to addressing immediate market access barriers and includes a declaration to work towards a full FTA.
The UK is pushing in the longer term to radically reduce the 150 per cent tariff levied by India on Scotch whisky and the 120 per cent tariff on cars, as well as secure more market access for British service providers, particularly in the legal sector.
India’s 1.4 billion population – more than the EU and US combined – make it the largest market with which the UK is trying to negotiate a trade deal.
The announcement comes after The Telegraph revealed on Monday that Britain and India are on the cusp of signing a new “migration and mobility partnership”.
The agreement will see the UK liberalise visas for Indian students wanting to enrol in British universities, in return for India agreeing to take back migrants living illegally in the country.
Thousands more Indians are expected to take advantage of the opportunity to study in the UK.