To strengthen economic ties and enhance trade opportunities between India and the UK, the two nations are holding the 12th round of talks on the proposed Free Trade Agreement (FTA) from August 7. Both sides are looking forward to concluding the talks of the proposed FTA before the end of this year.
According to a government official, the main issues which could come up for discussions in this round of discussion, include investment treaty, reduction of duties on auto and whiskey and matters pertaining to services. Discussions on 19 out of the 26 chapters have been closed.
On July 18, 2023, India and UK concluded the eleventh round of talks for the agreement. Both countries discussed ways to make progress on the FTA negotiations and wider trade and investment opportunities for the UK and India. Technical discussions were also held across 10 policy areas over 50 separate sessions. They included detailed draft treaty text discussions in these policy areas.
India sees an FTA with the UK as crucial with the hope of becoming a bigger exporter, while the UK would obtain wider access for its whisky, premium cars and legal services. For India, an FTA with the UK would be its first with a developed country after it signed an interim trade pact with Australia last year.
The Indian industry is looking for increased opportunities for its skilled professionals from sectors like IT and healthcare to enter the UK market and also desire market access for various goods with no customs duties. Conversely, the UK is aiming to reduce import duties substantially on products like scotch whiskey, automobiles, including services into Indian markets in segments such as telecommunications, legal and financial services like banking.
The bilateral trade between India and UK has been increased to USD 20.36 billion in 2022-23 from USD 17.5 billion in 2021-22. In 2022-23, India received USD 1.74 billion in foreign direct investment from the UK as against USD 1 billion in 2021-22. On May 4, 2021, the prime ministers of the two nations expressed their shared aim in increasing trade by 2030 and lowering trade barriers in important areas. On January 13, 2022, discussions for a Free Trade Agreement began after an Enhanced Trade Partnership was established.
Earlier, Union Minister Piyush Goyal said that the India-UK FTA will contribute in integrating value chains and help augment our mutual efforts to strengthen the resilience of supply chains. He said that the two nations were looking forward to a mutually beneficial trade deal with balanced concessions and market access package in a wide range of sectors.