06/10/2016 6:59 PM IST | Updated 07/10/2016 12:32 PM IST

UK Cos. Push For A Post-Brexit Bilateral Trade Treaty With India That's Fit For A 'Digital Economy'

Informal talks for a "comprehensive trade agreement" have already begun

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As the UK prepares for a post-Brexit world, business leaders in the UK and India are pushing for a separate bilateral trade treaty between the two countries that will lay the framework of a long-term economic partnership.

While the UK can't enter any formal trade negotiations until Brexit is complete -- expected to take another two or three years -- informal discussions for a "comprehensive trade agreement" have begun, Patricia Hewitt, chair of UK-India Business Council told HuffPost India.

Hewitt, a former trade secretary in the UK, said in an interview with HuffPost India that since the referendum, India has become even more important, especially as the UK starts thinking about strengthening its trade ties with the European Union post-Brexit and the rest of the world, particularly with the fast-growing economies such as India. UK businesses are also optimistic about India's growth and pace of reforms such as the passing of the GST bill, relaxed FDI rules, among others.

Richard Heald, CEO of UKIBC, added, "Business on both sides are excited about how can you take the level of investments in each others' countries and build it up further through a comprehensive economic agreement," noting the UK is among the largest G20 investors in India with FDI investments, pegged at about $22.2 billion between 2000 and 2015.

Heald added business are in the process of informing their governments on how they see trade evolving over time "so that whatever agreement is put in place is fit for the next 20-30 years as opposed to what is right for the day we sign the agreement." The agreement will likely seek to cover a number of traditional sectors as well as emerging ones such as digital technology, advanced manufacturing, going beyond the trade agreements of the past while ironing out issues such as data security and entry visas and removing trade barriers such as tariffs.

"In the past, trade agreements have tended to focus on products -- physical goods that you can put into a container. Both India and the UK want to see modern, 21st century economic agreements that are fit for the digital economy and are at least as much as about services as about the trade in goods," said Hewitt.

UK businesses have so far invested in a variety of sectors in India ranging from telecom to insurance, and are increasingly looking at sectors such as urban planning and development, India's smart cities, brown-field investments, smart infrastructure, fin-tech, edu-tech, health care, among others, said Hewitt. As of 2015, UK's investment in India was highest in the chemicals sector at $3.7 billion.

She noted the lure of the services sector, which makes up a large part -- nearly two thirds of the UK economy -- is now rapidly driving growth in India too in areas such as IT and tourism, among others.

On the flip side, a number of Indian businesses are keen to expand into the UK market, bringing products and services such as big data technology and analytics tools in the health care sector, for instance, said Heald.

"The UK offers a very open, protected platform for technological development for Indian companies which then can be brought back to India in a commoditised and adaptive format to be used in India, said Heald.