india-uk-to-resume-trade-talks

India and the United Kingdom are set to restart discussions on the proposed Free Trade Agreement (FTA) from February 24. The negotiations, which had been stalled due to the election cycles in both countries, are expected to resume with renewed focus.

 

A UK trade minister is likely to visit India soon for the talks, aiming to advance the agreement that could significantly enhance bilateral trade and investment.

 

The discussions on the trade pact originally began in January 2022, with both nations working towards reducing or eliminating customs duties on a wide range of goods.

 

The agreement also seeks to ease regulations related to trade in services and bilateral investments. The Indian industry is keen on securing greater access for skilled professionals in sectors such as information technology and healthcare, in addition to seeking tariff-free market entry for several key goods.

 

On the other hand, the UK is pressing for a substantial reduction in import duties on products like Scotch whisky, electric vehicles, lamb meat, chocolates, and certain confectionery items.

 

Britain is also looking for expanded opportunities for its service sector in India, particularly in telecommunications, legal, and financial services, including banking and insurance.

 

The negotiations may gain momentum following India's announcement of financial sector reforms in the recent Union Budget. Finance Minister Nirmala Sitharaman has proposed increasing the foreign direct investment (FDI) limit in the insurance sector from 74 per cent to 100 per cent.

 

This move is expected to attract greater participation from international investors and could have a positive impact on the ongoing FTA discussions.

 

In addition to the trade deal, India and the UK are also working on a bilateral investment treaty (BIT). The FTA comprises 26 chapters covering various aspects, including trade in goods and services, investments, and intellectual property rights.

 

The economic ties between the two nations have been growing steadily. The bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from USD 20.36 billion in the previous fiscal year.

 

With the resumption of talks, both sides are hopeful of finalising an agreement that will provide new business opportunities and strengthen economic cooperation.