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Modi’s vision for India ‘makes economic powerhouse crucial partner’ for Britain

UK Trade Secretary, Anne-Marie Trevelyan, is meeting with India’s trade chief, Piyush Goyal, on Friday for the fourth round of talks on a trade deal between both countries.

This is a matter of urgency for the government, as officials rush to get the agreement over the line by October 24.

India is predicted to grow at the fastest rate this year – beating the likes of China – with an expected 7.3% increase in GDP. With publicly traded companies doubling in profit, alongside exports reaching a record high, India’s booming success has largely been credited to Prime Minister Narendra Modi’s promise to the nation in 2019 to double the size of the economy by 2024. This would lift the country into a $5 trillion (or more) club alongside the US, China and Japan.

The UK–India investment relationship between is already worth £24bn and supports more than half a million jobs across the UK, however this looks set to grow exponentially after the FTA is secured.

As countries worldwide begin to reconsider trade relationships, Modi’s vision for India has made him a crucial figure in bridging the West and East for mutually beneficial purposes. This intent is particularly clear in the UK-India trade talks which are in their latter stages and have become a top priority for both sides, especially given what the countries stand to gain from the agreement. This would also mark a huge victory for Boris Johnson post-Brexit, and add some much-needed fuel to a wavering UK economy.

Britain’s stunted growth in the tech sector specifically is clearly disrupting the economy as a whole, with research from JPIN, the largest bilateral investment bank across the UK and India, finding that 25% of the UK workforce state that the absence of tech talent in their business is stunting their growth.

Further to this, 36% of the workforce cite a lack of skilled talent more generally as the biggest factor holding back their firm. As Britain continues to navigate the current economic situation, the prime minister has made it clear India presents a massive opportunity to help the country return to its days of being the world’s leading digital hub.

Dubbed as Asia’s Silicon Valley, India’s $3 trillion economy – home to 25% of the world’s engineers – will assist the UK with strengthening cyber security, science, tech innovation, and education. India’s young and dynamic population of 1.39m people is set to assist with bolstering Britain’s digitalisation plans in the next few decades. Recently, the largest ever delegation of UK universities met with India’s key and central government officials to scout for New Education Policy (NEP) aligned collaborations. Further to this, the UK government recently introduced the High Potential Individual (HPI) visa scheme in an attempt to future-proof the country by creating sound building blocks for the skilled sectors.

Nayan Gala, founder of JPIN, said: “India is one of the world’s largest economies and presents huge potential as a key partner for trade and investment for the UK. India is a 21st century powerhouse and therefore, establishing a solid relationship with the UK in trade, technology and security could be significantly beneficial for both parties. The significance of the relationship between both parties cannot be underestimated.

“It’s clear that closing the trade deal is a top priority for the government, and there appears to be fewer stumbling blocks as we edge closer to the finish line. India is goods and resource-wealthy, growing exponentially, and will be the centre of world trade in the coming decades. Therefore, building a trade and technology relationship here is particularly important to allow the UK to benefit from the immense growth India is already experiencing.

“In what looks to be the final round of discussions, we are likely to see a continued focus on alleviating Britain’s pressure in the tech and programming sector. The discussion will also look to ways that the deal could help with small businesses in both countries, especially because the levelling-up agenda is such as pressing matter for the UK government. These talks will look to future-proof the economy, and it’s fantastic to see that it’s slowly coming to fruition.”

Government unveils training scheme for future trade experts

The International Trade Secretary Dr Liam Fox MP has announced the world’s first training programme to recruit tomorrow’s trade negotiators.

The two-year scheme, which pays £30,109 per annum, includes placements with the UK’s expert trade negotiating teams working on future trade agreements with partners including the United States and Australia, as well as the teams supporting UK companies to export their goods and services, and a six-month international placement in one of DIT’s 127 international offices.

Unlike traditional graduate schemes, no qualifications are needed to sign up to the programme, with the majority of candidates expected to be school leavers aged 18 or over, people switching careers or those looking to work in government for the first time.

The scheme is intended to develop the UK’s talent pool of trade policy and promotion experts, as the UK prepares to leave the EU and implement an independent trade policy for the first time in 40 years.

International Trade Secretary Dr Liam Fox MP said: “For decades, people didn’t look at trade as a viable career option. Now, the International Trade Development Programme will make a career in trade policy and promotion not only viable but highly desirable.

“A whole generation will be equipped with these vital skills, charged with driving our export and investment performance, securing market access deals for our businesses and promoting the UK’s prosperity.

“My vision is that anyone joining the scheme will be able to enjoy their whole career at DIT, building skills and experience across the department to eventually take on one of our highest-ranking and most prestigious roles as HM Trade Commissioners.”

Applications are open until 4 August at: readytotrade.co.uk.

The announcement is part of DIT’s commitment to open up new career and expertise opportunities in trade policy and promotion. Last year, it launched the National Trade Academy Programme which has ran in parallel with the Board of Trade across the UK, giving higher education students unique opportunities to learn about doing business internationally from British entrepreneurs and trade experts.

This year, the National Trade Academy Programme is open to 16-18 year olds for the first time with three Summer Schools in Edinburgh, Bristol and Birmingham. The Schools include trade simulation games to encourage students to think about the challenges and opportunities facing exporters, insights from successful exporters and an exporting challenge.

DIT’s Chief Trade Negotiation Adviser Crawford Falconer said: “This is a great opportunity to show young people that there is a whole range of careers in trade and, for the first time, DIT is opening up these opportunities.

“I look forward to working with some of these young people when they become entrepreneurs, exporters and even trade experts in my team.”

Image by hectorgalarza from Pixabay

Brexit: Assessing the UK’s imports and exports

How will Brexit impact the UK’s trade? It’s the question burning in every businessperson’s mind, and it doesn’t seem to be getting an answer any time soon.

According to the Independent, many companies are struggling to decide on importing and exporting in light of confusion over the direction Brexit will take businesses. But what is the current state of the nation’s trading with the wider world?

In this article British brand Gola, that is renowned for its silver trainers, take an in-depth look at the UK’s imports and exports, from the items we sell the most of to what we’re buying in, as well as which countries are our top import and export locations… 

The key terms to know! 

Before we delve further into what the UK has to offer in terms of trade, let’s break down some of the terminology: 

  • Single market — The European Single Market is a single market that guarantees the free movement of goods, services, capital, and labour within the EU. 
  • Customs Union — A customs union is where a group of states or countries agree to charge the same import duties to each other. 
  • Import and export — an easy one to start with, imports are items and goods we buy into the country. Exports are items and goods we sell to other countries. 
  • Trade deficit and trade surplus — these two terms come under the umbrella of the balance of trade. It is essentially the difference between monetary value of a country’s exports and imports. If a country is importing more goods than it is exporting, then the country has a trade deficit. A trade surplus occurs if a country is exporting more than it is importing. Generally, a trade deficit is considered concerning as it is seen as the country being unable to produce enough goods to supply its people, requiring them to import more.  
  • “Special relationship” — The oft-cited “special relationship” with the US boils down to our trade relationship. In 2016, the UK exported £100 billion worth of goods and services to the US, running a trade surplus with the US of £34 billion. 

It is important to note that, regarding the “special relationship” with the US, the UK does export more to the US than any other country. However, when considering the EU as a whole with the same trade laws etc, rather than 27 separate countries, the EU imports more from the UK than the US by far.

What does the UK export? 

According to the Observatory of Economic Complexity (OEC), in 2016 the UK’s top export item was cars, which accounted for 12% of the overall $374 billion export value that year.

Other popular UK products were gas turbines (3.5%), packaged medicaments (5.2%), gold (4.0%), crude petroleum (3.4%), and hard liquor (2.1%). We also export a fair amount of food and drink, with items such as whisky and salmon popular abroad. 

The BBC also points out that exports and imports are not just physical goods. In this digital age, it’s easier than ever to offer services as exports too, and the UK does just that, via financial services, IT services, tourism, and more. 

Where exactly is the UK exporting to? 

In 2016, our top export destinations were: 

  1. United States (14%)
  2. Germany (9.5%) 
  3. The Netherlands (6.0%) 
  4. France (6.0%) 
  5. Switzerland (5.1%) 

China, one of the countries the UK is eyeing up for a potential trade deal after Brexit, accounted for 5%. Again, it is worth considering that Europe as a whole accounted for 55% of our top export destinations. 

What does the UK import? 

We are importing rather similar items as we’re exporting. Top imports into the UK in 2016 included gold (8.2%), packaged medicaments (3.1%), cars (7.8%) and vehicle parts (2.5%). 

Where does the UK import from? 

For 2016, the top origins of the UK’s imported products were: 

  1. Germany (14%) 
  2. China (9.8%) 
  3. United States (7.5%) 
  4. The Netherlands (7.3%) 
  5. France (5.8%) 

The UK’s trade deficit and trade surplus 

Despite our popular products, the nation is sitting with a trade deficit to the EU — we import more from the EU than we sell to the EU. In 2017, we exported £274 billion worth to the EU, and imported £341 billion’s worth from the EU. In fact, the only countries in the EU that bought more from us than we bought from them were Ireland, Sweden, Denmark, and Malta. Our biggest trade deficit is to Germany, who sold us £26 billion more than we sold to them. 

The UK also has a trade deficit with Asia, having sold £20 billion less in goods and services than we bought in. 

As previously mentioned, we have a trade surplus with the United States, as well as with Africa. 

A trade deficit is generally viewed in a poor light, as it is basically another form of debt: the UK imported $88.4 billion from Germany in 2016. Germany imported $35.5 billion from the UK, making a difference of $52.9 billion owed by the UK to Germany. 

With uncertainty abound about the impact of Brexit on imports and exports, it remains to be seen how UK businesses will continue to trade abroad, and if focuses will shift.

Sources: 

https://atlas.media.mit.edu/en/profile/country/gbr/

https://www.ons.gov.uk/businessindustryandtrade/internationaltrade/articles/whodoestheuktradewith/2017-02-21

https://www.bbc.co.uk/news/business-41413558

https://www.independent.co.uk/news/business/news/brexit-uk-imports-exports-uncertainty-british-import-export-business-a8589796.html

https://www.investopedia.com/articles/investing/051515/pros-cons-trade-deficit.asp

https://fullfact.org/europe/what-trade-deficit-and-do-we-have-one-eu/

https://www.dw.com/en/is-germanys-big-export-surplus-a-problem/a-18365722