FICCI calls for FTAs

The Federation of Indian Chambers of Commerce and Industry (FICCI) has called for a restart of the Free Trade Agreement between India and the European Union as well as the United Kingdom, saying the world wants to associate with the strong Indian economy.

“The global environment has changed. India today is a very strong and important economy that other countries want to associate with,” said FICCI Secretary General A. Didar Singh, calling for the restart of the India-EU FTA which has been on the anvil for 10 years.

“Therefore, we feel India-EU FTA has a much better chance being operative and coming on for a common cause now because businesses need that,” he said after addressing the South Asian Diaspora Convention held July 18-19 in Singapore.

Singh said the India-United Kingdom FTA would clear the current uncertainty among businesses created by the UK’s decision to leave EU, or Brexit.

Some 800 Indian companies based in UK said the FTA would be a solution to the current uncertainty created by Brexit.

These Indian companies have reported a sudden 15 per cent decline in return on investments as the pound sterling fell 15 per cent following Brexit vote last month.

Responding to a recent FICCI survey, the companies said they see a decline in profitability over the next three to five years, especially following the split decision which will impact their European business done through UK-based offices.

The companies, responding to the survey, said they were facing problems in getting new contracts and businesses.

Over 50 per cent of the 800 Indian companies surveyed have presence in the EU through UK offices.

“All these businesses will have to be re-calibrate their strategies,” Singh said of the Brexit impact and uncertainty faced by business over the next two years.

There are concerned about managing business in the post-Brexit environment, with some companies would likely to have set up another office in the EU, which would add more costs.

Some others may relocate to other business EU business cities.

Singh also hoped that the India-UK FTA would help relax student visas conditions allowing internships and employment for Indians studying there.

Economic agreement can help the students with internships and employment. Earlier visas provided two years of employment. This has been withdrawn about 2-/12 years ago.

There has been more than 20 per cent drop in Indian students studying in the UK since 2014. fii-news.com