Last updated: 10 Dec 2024 11:00 Posted in:
India and the UK will resume talks for a free trade agreement (FTA) in the new year, following months of flux due to general elections in both countries.
An announcement was made following a recent meeting between Prime Minister Sir Keir Starmer and his Indian counterpart Narendra Modi, the first meeting between the two leaders.
“Both leaders underlined the importance of resuming the Free Trade Agreement negotiations at an early date and expressed confidence in the ability of the negotiating teams, to address the remaining issues to mutual satisfaction, leading to a balanced, mutually beneficial and forward looking Free Trade Agreement,” India’s Ministry of External Affairs said in a statement.
India and the UK have been negotiating a trade agreement since January 2022.
Both sides made substantial progress when Rishi Sunak became UK’s leader, but FTA talks were delayed due to elections in both countries. Modi was sworn in for his third term as Prime Minister in June and a new Labour government in the UK took over in July.
“A new trade deal with India will support jobs and prosperity in the UK – and represent a step forward in our mission to deliver growth and opportunity across our country,” the UK government commented.
The last round of negotiations took place in March, before the pre-election model code of conduct kicked in mid-March onwards in India. Thereafter, FTA deliberations on the outstanding issues, including areas related to services, were held in May.
“The Business and Trade Secretary announced the UK’s commitment to relaunching talks with Free Trade Agreement partners in July. The Department for Business and Trade will soon unveil the government’s new Trade Strategy, aligned with the Industrial Strategy, to help inform future trade talks and achieve long-term sustainable, inclusive and resilient growth through trade,” said Downing Street in a statement.
Modi and Starmer directed their ministers and senior officials to work towards faster implementation of the various understandings that form part of the India-UK Comprehensive Strategic Partnership, according to a report in the Global Times.
There are issues under discussion in both the goods and services sectors. Indian industry is demanding greater access for its skilled professionals from sectors like IT and healthcare in the UK market, besides market access for several goods at nil customs duty.
On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, electric vehicles, lamb meat, chocolates and certain confectionary items.
Britain is also looking for more opportunities for UK services in Indian markets in segments like telecommunications, legal and financial services (banking and insurance).
The two countries are also negotiating a bilateral investment treaty (BIT). There are 26 chapters in the agreement, which includes goods, services, investments and intellectual property rights.
The UK is India’s 14 largest trade partner and the fourth-largest export market. In the first six months of this financial year, bilateral trade between both countries stood at $11.5 billion.
“A new trade deal with India will support jobs and prosperity in the UK – and represent a step forward in our mission to deliver growth and opportunity across our country".
UK Government