The negotiations between India and the United Kingdom (UK) on a Free Trade Agreement (FTA) are at “closing end” and once the understanding is reached on details of Bilateral Investment Treaty (BIT) both pacts will be ready for signing, a senior official said. “No further rounds of negotiations would be required on the FTA. Talks on BIT are still going on,” the official said.
A team from the UK was in New Delhi this week for BIT negotiations with officials from the Ministry of Finance. The UK team’s visit came after finance minister Nirmala Sitharaman visit to London in the second week of April for the 13th Economic and Financial Dialogue with the UK.
The joint statement after the meeting said, “both sides look forward to furthering the bilateral relations between our nations, including continuing negotiations at pace towards a mutually beneficial FTA and BIT.
The India-UK FTA talks were launched in January 2022. Since then 14 rounds of formal negotiations have taken place. The talks were suspended in May last year intervened by elections in both the countries. Following the elections in UK that witnessed the Labour Party emerging victorious; the new secretary of state for the department for business and trade, Jonathan Reynolds visited New Delhi in March to resume trade talks.
While officials from the UK and India may not be engaging in any formal setting of negotiations, there is constant touch on matters related to the FTA, the official added. Apart from FTA and BIT, a social security agreement formally called Double Contribution Convention Agreement, is also being negotiated by both sides.
While the UK is asking lower duties on automobiles, electric vehicles (EVs), whisky and national treatment for its services sector in the FTA. India is seeking greater access to its labour-incentive manufacturing sector to the UK market apart from greater flexibility in grant of visas to its service professionals. In the agriculture sector, India has conveyed its sensitivities to the UK. The UK is the fourth biggest export market for India with shipments growing 12% on year to $ 14.5 billion in 2024-25.
On FTA with the European Union (EU), the official said that the 27-member bloc has agreed in principle to conclude the agreement in tranches in view of the year-end deadline that was agreed to when the entire European Commission (EC) leadership visited India in March. “Now they have to discuss the idea of FTA in tranches with every member of the bloc,” the official added.