Why you’d probably welcome a UK trade deal with India

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indiaUK Business Secretary Sajid Javid has been over in India discussing what a post BREXIT trade relationship with the country could look like.

After China, India is the 2nd most populous country in the world. With more than 50 million online shoppers and internet population that is set to surpass half a billion by 2018 India is one of the most exciting countries in the world from an ecommerce growth perspective.

The EU don’t currently have a trade agreement with India, although they’ve been talking about it for almost a decade. Since 2007 there have always been too many barriers with both sides stalling on agreements ranging from motors to dairy produce, from agricultural subsidies to booze tariffs. Either way a deal has yet to be done.

For Tamebay readers, the main interest is the pure ecommerce side of trade with India. Online sales in India are expected to reach $29bn by 2017 and will continue to grow reaching a staggering $100bn by 2021.

There have been a number of barriers to entry in India, both the rules for marketplace investment affecting companies such as Flipkart and Amazon, and the rules for merchants which pretty much means that you need to partner with an Indian based merchant of record. The Indian merchant buys from you and then sells under their own company on the Indian marketplace which is tiresome to set up and more complicated to manage then simply listing and selling directly on an Indian site yourself.

It’s early days, but if the UK can negotiate a bit more freedom for sellers in the UK to sell on Indian marketplaces then a deal between the UK and India would be something many would welcome. India would also be happy – something like 30% of Indian exports come to the UK so we’re an important customer to them too.

9 Responses

  1. A fulfilment centre in India would be a big deal for UK sellers, because there is a huge middle class expanding market and the population is huge.

    India could easily become a critical part of your sales, access for small sellers is a very major and important deal that I think is overlooked.

  2. There are some realities you need to be aware of when dealing with India. Firstly, the infrastructure is hopeless, so shipping, electricity, transportation, etc, means the cost of doing business is expensive and there are a multitude of things that can go wrong, some places are not even fully serviced by the post office or courier companies. Second the bureaucracy is impossible, you might wonder why very few Indians purchase from overseas despite a proficiency in English and a sizeable middle class, that’s because just to post a package there requires an airways bill and special invoices included with the package to avoid major customs delays and fees amounting to nearly the purchase price of the order, and that’s from a country which already has a free trade agreement (I won’t mention which one for my own privacy). Third, anything from the first world would be astronomically expensive compared to local products with practically no brand penetration, not to mention not at all adapted to local use. Fourth, unless you have an intimate understanding of India, it’s business environment and it’s culture, you’re extremely poorly equipped to do business there, especially if you can’t compete on price. Fifth, other countries have spend literally decades negotiating a trade deal with India, and even once signed will take years to come into full effect, so unless you don’t mind waiting ten or fifteen years you’re out of luck. Sixth, even if you wait for a free trade agreement with India (which may not even happen, remember, India is still rather sore about 89 years of colonial rule), it will almost certainly be on less favourable terms that the EU’s eventual trade agreement. The same can be said for China and other key markets.

    Bottom line, just because Osborne is visiting India is meaningless, there is absolutely nothing to suggest this is a good thing. Brexit is the biggest disaster the UK will face in it’s post war history. If you’re smart you’ll relocate to Warsaw, Berlin or Madrid while you still can. At least the weather there’s better and you’ll have a chance at a free trade agreement before you retire.

  3. I can remember back to the night after the Referendum. As the results rolled in and it became obvious that BREXIT was going to happen that the first thing that came into my mind was the importance of doing Trade Deals.

    When we joined the Common Market all those years ago and as it morphed into the accursed EU we were forced to turn our backs on our historic friends and indeed Kith and Kin in the Commonwealth. Now we have regained our Independence we can start the long job of re- opening up Trade Agreements with our friends. Australia, New Zealand, Canada, South Africa; The Caribbean States, India, Pakistan, Bangladesh, Malaya, Singapore, Nigeria and the other African Nations etc.

    All of these stood by the UK during World War 2 and we should have made these Nations the first target of our Negotiators on day i after Brexit. So I would not critisise any Government Minister who is out visiting and negotiating with our historic friends. However with any negotiation there is no guarantee of success.

    But the Commonwealth Nations should be our first targets. After all we speak the same language as most of them,which we never did with the majority of the EU Nations.

    If we are going to succeed in the Post Independence World we need to Trade. Not just with a corrupt and bureaucratic EU with a currency that is on its last legs but with the whole of the World. Free Trade will be a massive boost for not only the UK but the whole of the World.

    We have heard all sorts of stories that the EU is going to ‘punish’ the UK for leaving the EU. But they sell us getting on for twice what we sell them. So if they put up Trade Barriers of whatever sort we can expect that the UK Government will put up similar Barriers to EU Exports to the UK. From that sort of madness the EU is going to be by far the greatest loser. especially if we are already increasing dramatically our Trade with the Commonwealth and indeed the rest of the World.

    So if India is slow to join with us in Trade Deals we should not abandon them but get on with the rest of the Commonwealth Countries, America, and indeed the Rest of the World Nations and hope that India recognises the massive advantages that could exist for India if it put its time into sorting out their problems and then in a few years time join us in the massive benefits that each and every Country that works with us could achieve.

  4. shipped 3 times to india in 20 years of online trading
    all 3 stolen or package returned empty
    the empty package was accompanied by a telephone book of forms and official dribble

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