The United Kingdom and the Republic of India formally launched their negotiations on an ambitious free trade agreement (FTA) last month (13 January 2022). The announcement was made in New Delhi by the UK trade secretary Anne-Marie Trevelyan and the Indian minister for commerce and industry Piyush Goyal.
The Law Society of England and Wales welcomes the start of these trade negotiations as India continues to be one of the key priority jurisdictions for its international work. There are many opportunities to increase trade in professional and business services between the UK and India and we hope both sides will collaborate on the enormous potential that exists in this sector.
India is set to become the world’s third biggest economy by 2050 and, according to the UK government, the trade deal between the two countries has the potential almost to double UK exports to India. Given the rapid growth of the Indian economy as well as the expansion of Indian companies abroad and foreign companies in India, the demands on the legal sector is expected to increase in the near future. The UK is well placed to support Indian growth through its provision of leading professional and business services.
The UK is the world’s second largest legal services market globally. Legal services contributed £60bn to the economy in 2018, supporting around 552,000 full time employees. According to the UK’s Department for International Trade, the trade agreement could create huge benefits for both countries boosting UK’s total trade up to £28 billion a year by 2035 and increase wages up to £3 billion across the UK. The government wants to ensure that UK services sector maintains its world-leading position, and this would be strengthened by greater access for UK professional and business services.
Both governments have committed to build upon the Enhanced Trade Partnership (ETP) during the trade negotiations which was launched by their respective prime ministers in May 2021. The ETP includes a focus on legal services with a commitment to remove barriers in the Indian legal services sector. Such a step could significantly increase UK legal services exports and imports from India. The UK’s services exports to India amount to £3.2 billion, while India has an expanding professional services sector which accounts for 54% of its economy.
There are benefits to the opening of the services sector to Indian industry and the Indian economy. Currently, Indian businesses have to procure foreign legal advice outside of India, be it in London, Dubai or Singapore. Greater connectivity with the UK legal services market will allow Indian companies to realise their international ambitions within India at a competitive cost. The presence of UK law firms and UK lawyers would not only facilitate international trade but also provide opportunities for young legal professionals to develop globally competitive skills without needing to leave India for another international hub.
As a part of the negotiations both governments will be considering the option of an Interim Agreement generating early benefits to both sides. The India-UK Joint Economic and Trade Committee (JETCO) will continue to address market access barriers outside of the FTA and continue to work on improving the trading relationship between the two countries. The first round of negotiations kick-started on 17 January making it UK’s fastest start of formal talks between negotiating teams following a launch.
The Law Society welcomes this focus and is fully supportive of the UK government’s efforts to address barriers in the professional and business services sector, thereby enabling further collaboration and allowing UK’s businesses to offer expertise, increase trade, and stimulate the Indian market. We look forward to engaging with the UK government and our Indian counterparts on reaching a trade agreement which has potential to reap massive economic benefits for both countries.
Law Society of England and Wales president I. Stephanie Boyce
No comments yet