Recalibration is required as some items of interest to Britain may have to be removed
With Britain deciding to exit from the European Union, India will have to rework the proposed free trade agreement with the single-currency bloc, a top government official has said.
"My interest will get changed because number of tariff lines (products) will change (now). I will calibrate and the EU will also calibrate. Now they would reassess and we will also be going to reassess," commerce secretary Rita Teaotia told PTI.
She was replying to a question about the impact of Brexit on the ongoing negotiations between India and the EU on free trade agreement.
Teaotia said recalibration is required as some items of interest to Britain may have to be removed.
On the FTA issue, Commerce and Industry Minister Nirmala Sitharaman said: "I would think, they (EU) would need time now to assimilate this outcome. Once they assimilate the outcome, they will only then respond...I will talk to my counterparts."
Launched in June 2007, the negotiations for the proposed Broad-based Trade and Investment Agreement (BTIA) have seen many hurdles with both sides having major differences on crucial issues like intellectual property rights, duty cut in automobile and spirits and liberal visa regime.
Sitharaman and European Union Commissioner for Trade Cecilia Malmstrom had met in Paris earlier this month and discussed issues including possibility of resuming the long stalled FTA negotiations.
The talks have been held up since May 2013 as both the sides are yet to bridge substantial gaps on crucial issues.
Although top officials from both the sides have met, but they have not yet fixed any date to resume the talks.
Talking about the impact on Brexit on trade, the secretary said that it will not have any immediate impact.
"Brexit will not impact our trade with the UK. With EU also, nothing directly affects our trade. In long term, we would be interested to see how UK negotiates its exit from
EU," Teaotia said.
Sitharaman also said the first impact would be visible on currency volatility as there is a possibility of devaluation of the pound and euro.
"So the impact of volatility of the currency is something which might have an immediate impact on our exporters," the minister told reporters.
She said India is in a position to face the eventuality of this outcome.
"We will however have to keep watching currency based volatility, both in the short and the medium term and also look at the impact on overall trade itself," Sitharaman said.
The bilateral trade between India and the UK stood at $14 billion in 2015-16 as against $14.33 billion in 2014-15.
India has received $23.10 billion FDI from Britain during April 2000 and March 2016.
Two-way trade between India and the EU dipped to $88.4 billion in 2015-16 from $98.5 billion in the previous fiscal.
Photograph: Stefan Wermuth/Reuters