On her first visit outside EU, prime minister Theresa May (pictured) is expected to push for a trade deal with major business partner India, which will be negotiated and signed as soon as the UK officially leaves EU. The three-day visit begins from Sunday.
India's merchandise trade with the UK currently stands at $14.02 billion, which is a 2.21 per cent fall over the previous year. The last time trade saw a positive growth was 2013-14, when it grew 6.16 per cent.
Under current rules, EU member-nations cannot negotiate trade deals on their own. While both nations have not stated their intentions to start negotiations, broad discussions on economic relations have already taken place.
These discussions include investment and merchandise trade, a commerce ministry official said on the condition of anonymity. Services trade, where both nations show significant strength, may emerge as an area of contention, he added. India is currently bogged down in negotiations regarding trade pacts on services trade, most notably the Regional Comprehensive Economic Partnership (RCEP) with Asean and its Free Trade Agreement (FTA) partners.
Asean is Association of Southeast Asian Nations.
The grounds for an FTA have been prepared over meetings between UK and India officials in July and August.
Then, both sides had decided to set up a joint working group to work out the details of "economic and commercial relationship which can be built and strengthened". Liam Fox, UK's global trade secretary, will visit India from Sunday to Tuesday to review the work of the group.
India's main exports include apparel, over $905 of which were exported in 2015-16. Garment manufacturers and exporters are hopeful of consolidating their presence in the UK after the last decade saw Bangladesh and Vietnam slowly capture the EU market, experts pointed out.
The area of investment will also be important to the talks as India is currently the third-largest investor in the UK, behind the US and France. It also emerged as the third-largest job creator in the UK in 2014-15, with about 110,000 people currently employed by Indian firms.
On the other hand, the UK is also the source of the third-highest amount of investment into India, with eight per cent of the total inflow into the country between 2000 and March 2016.