Indian minister visits UK for free trade agreement negotiations
Piyush Goyal, Union minister of commerce and industry, has returned from a two-day official visit to the UK, during which he discussed the strengthening trade relationships between India and the UK and also between India and the European Free Trade Association (EFTA) member nations.
Both India and the UK are exploring possible avenues to bolster bilateral trade through a free trade agreement (FTA). “The minister’s visit is expected to accelerate the pace of these FTA negotiations, potentially leading to a comprehensive pact that would spur economic growth and deepen ties between India and the UK,” ministry of commerce and industry said in a press release.
As part of his UK visit, Goyal held high-level talks with his counterparts, including the secretary of state for international trade, Kemi Badenoch. The pair discussed key priorities and objectives of the FTA negotiations, as well as other significant issues such as trade barriers, investment promotion and increased cooperation in sectors like technology, innovation, and intellectual property rights.
Goyal’s visit also included discussions with ministers and officials from EFTA member countries Switzerland, Norway, Iceland, and Liechtenstein. These talks concerned the Trade and Economic Partnership Agreement (TEPA) with EFTA, an initiative aimed at augmenting trade and economic collaboration between India and the EFTA nations. The TEPA discussions focused on fostering an environment that supports increased investments, lessens trade obstacles, and provides wider market access.
Negotiations for a trade agreement between India and the UK were launched on January 13, 2021.
India wants more tax from multinational firms
India is to push its Group of 20 partners to support its proposal to raise the share of taxes multinational companies pay to countries where they earn “excess profits”, government officials said.
India’s proposal could temper optimism among G20 members such as Australia and Japan that the meeting of finance ministers and central bankers in Gujarat would make progress on a long-awaited overhaul of global corporate taxation, Reuters has reported.
More than 140 countries were due to start implementing a 2021 deal overhauling the rules on how governments tax multinationals in 2024. The present rules are widely considered outdated as digital giants like Apple and Amazon can book profits in low-tax countries.
The deal would levy a minimum 15% tax on large global firms, plus an additional tax on 25% of “excess profits”, as defined by the Organisation for Economic Cooperation and Development (OECD).
But several countries have concerns about the multilateral treaty underpinning a major element of the plan, and some analysts say the overhaul is at risk of collapse.
“India has made suggestions to get its due share of taxing rights on excess profits of multinational companies,” one official said. The suggestions have been made to the OECD.
Three officials, who asked not to be named, told the news agency that India wants significant increases in the tax paid in countries where the firms do business. They did not specify how much India is seeking.
Under the agreement, global corporations with annual revenues over €20 billion (£17.3 billion) are considered to be making excess profits if the profits exceed 10% annual growth. This 25% excess profit is to be divided among countries for them to levy tax.
India is the world’s most populous country and set to become one of the biggest consumer markets. Indian people’s average income is set to grow more than 13-fold to $27,000 by the end of 2047, according to a survey by the People’s Research on India’s Consumer Economy.
The OECD has issued a statement saying that a few jurisdictions have expressed concerns over allocating taxing rights among countries. “Efforts to resolve these issues are under way with a view to prepare the Multilateral Convention for signature expeditiously,” it said.
