With Britain's exit from European Union a reality now, India and the EU will have to recalibrate the proposed free trade agreement (FTA) with the 28-nation 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 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 EU on free trade agreement.
Teaotia said recalibration is required as some items of interest to Britain may have to be removed.
She clarified however that the talks will not start all over again.
"Not at all. There has been a lot of work done, there may be some modifications, moderation because of the work began in 2007 and we are in 2016 now. So certainly the world is some what different. Our policies have emerged...So the parameters of the discussions will be somewhat different.
"UK exit will certainly affect our interests that means what are those lines (or products), we are interested in, that will certainly have some repercussion. We will be studying that," she said later in the evening.
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.
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.
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 USD 14 billion in 2015-16 as against USD 14.33 billion in 2014-15.
India has received USD 23.10 billion FDI from Britain during April 2000 and March 2016.
Two-way trade between India and the EU dipped to USD 88.4 billion in 2015-16 from USD 98.5 billion in the previous fiscal.
When asked whether India would negotiate another FTA with
the UK, the Commerce Secretary said: "Once the entire terms and conditions of the UK exit are clear, (then we) would have the complete knowledge of where the UK stands and then it would make sense for us to look for a trade agreement. Meanwhile, we have been trading with the UK."
Teaotia added that immediately there would be no impact of Brexit as "we do not have any trade agreement in existence currently with EU".
"We are trading on a bilateral basis and we will continue to do so. What we will need to do is, watch how the equations and the road map of exit of the UK from the EU. How does that shape up and what would be the implications of that," she added.
Meanwhile, Tirupur Exporters' Association (TEA) said it appropriate time for India to commence FTA negotiations with the UK.
"The exporters feel that when we start negotiations with the UK immediately for FTA, we could get the early bird advantage and could increase our trade significantly," TEA said in a statement.
