📷 Image Credits: The Hindu
India and the United Kingdom are gearing up to finalize talks on the proposed free trade agreement (FTA) under new leadership. The Labour Party’s election manifesto for recent polls emphasized the importance of clinching the deal, signaling a strong commitment from both sides. The 14th round of FTA talks between India and the U.K. had been paused due to general election cycles, but with the new government in Britain, senior officials are set to resume discussions this month.
The upcoming negotiations aim to address pending issues in both goods and services sectors. India is advocating for greater market access for skilled professionals, especially from IT and healthcare fields, in the U.K. market. Additionally, Indian industries are pushing for reduced import duties on certain goods. On the contrary, the U.K. is seeking tariff cuts on items like scotch whiskey, electric vehicles, lamb meat, chocolates, and confectionary items, as well as more opportunities for U.K. services in India.
Furthermore, both countries are also working on a bilateral investment treaty (BIT) and have 26 chapters in the agreement covering goods, services, investments, and intellectual property rights. The bilateral trade between India and the U.K. saw a significant increase to $21.34 billion in the 2023-24 period from the previous year, showcasing the growing economic ties between the two nations.
The think tank GTRI suggests that the FTA agreement is nearly finalized, with minor adjustments required. These adjustments include considerations like the Carbon Border Adjustment Measure (CBAM) and other non-traditional subjects such as labor, environment, gender, and intellectual property rights. While the agreement holds potential benefits, challenges remain, particularly related to stringent sustainability requirements for Indian exports, potentially impacting sectors like textiles.
With both countries expressing their readiness to conclude a mutually beneficial FTA, the next round of talks presents a crucial opportunity to address key issues and pave the way for enhanced trade relations between India and the U.K. Stay tuned for further updates on the progress of the negotiations.
