UK and India ink huge investment deals

Move is expected to herald 'new highs' in relations between the two countries

The British and Indian governments unveiled new trade and investment deals worth 1 billion pounds ($1.39 billion) on Tuesday.

The agreements, which include more than 533 million pounds of investment into the UK from India, are part of a "new partnership" that Prime Minister Boris Johnson said will "pave the way" for a future UK-India free-trade agreement.

"The economic links between our countries make our people stronger and safer," the BBC quoted Johnson as saying ahead of an online meeting with Prime Minister Narendra Modi. That virtual meeting replaced a previously planned trip Johnson was set to make to India that was called off in the face of rising novel coronavirus infection rates there.

Johnson optimistically told reporters: "In the decade ahead, with the help of the new partnership signed today and a comprehensive free-trade agreement, we will double the value of our trading partnership with India and take the relationship between our two countries to new highs."

The deals, which Johnson said could create more than 6,500 jobs in the UK, mainly in the health and technology sectors, include a 240-million-pound investment by the Serum Institute of India to fund clinical trials and research connected to the manufacture of vaccines. The deals also open the door to more trade with India for British fruit producers and the nation's makers of medical equipment.

"Each and every one of the more than 6,500 jobs we have announced today will help families and communities build back from coronavirus and boost the British and Indian economies," Johnson said.

Dharshini David, the BBC's global trade correspondent, said London wants to build closer ties with the nation because it is one of the world's most populous and fastest-growing, economically.

International Trade Secretary Liz Truss, told Sky News, ahead of a meeting with her counterpart in the Indian government, that the agreement was "a win-win for both countries".

"It's about helping India with the immediate COVID crisis but also helping India build back better after the COVID crisis," she said.

Truss said talks between London and New Delhi on a full free-trade agreement would begin in the fall.

But experts warned India has been hard to please in free-trade negotiations in the past, often calling for easy access to visas for its workers, something that has capsized potential deals with nations including Australia and New Zealand.

The Independent newspaper reported on Tuesday the "enhanced partnership" between the UK and India could be overshadowed by a full free-trade agreement between India and the European Union.

The paper said talks on a deal between the nation and the bloc that were paused in 2013 could be restarted following a telephone call on Monday between Ursula von der Leyen, the European Commission president, and Modi.

Von der Leyen said after the call there was "clear momentum" and wrote on Twitter. "I'm encouraged by the prospect of intensifying our trade and investment relations."