India-UK FTA Talks: India and the UK have started the sixth round of talks for a free-trade agreement (FTA). This is the first round of negotiations after Rishi Sunak took over as the UK’s prime minister in October. The fifth round of talks was concluded in July.
International Trade Minister Kemi Badenoch, leading the negotiators for the UK, has arrived in New Delhi for the FTA talks, the UK high commission has said. “The talks — the first formal round since July — will target a deal to cut tariffs and open opportunities for UK services such as financial and legal, making it easier for British businesses to sell to an economy set to be the world’s third largest — with a middle class of 250 million people — by 2050,” the high commission added.
This is the first time Badenoch is meeting her Indian counterpart Commerce and Industry Minister Piyush Goyal, in person.
Trade in goods, including passenger vehicles, is one of the areas under the India-UK FTA negotiations, which started on January 13, 2022.
Negotiation officials undertook these technical talks in a hybrid fashion – with some of the teams meeting in New Delhi, India, and the majority of officials joining virtually. In this round of negotiations, technical experts from both sides came together for detailed draft treaty text discussions in 85 separate sessions covering 15 policy areas.
In a free-trade agreement, two countries either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. The UK side is demanding duty concessions in the automobile sector.
The UK is the sixth-largest source of FDI for India, with inflows of $32 billion between April 2000 and June 2022. The UK is also the seventh-largest export destination for India. The trade between the two countries has seen a significant jump in the past decade, with the bilateral trade rising 22.7 per cent to $13.1 billion between FY21 and FY10.
In 2021-22, the bilateral trade in goods between India and the UK got a boost when it rose to $16 billion in 2021-22 as compared with $13.1 billion in 2020-21, a jump of 22.17 per cent. In the current financial year 2022-23 so far, the India-UK bilateral trade stood at $8.85 billion, which is around 40 per cent higher year-on-year as compared with $6.28 billion in the year-ago corresponding period, according to official data.
India’s main exports to the UK included ready-made garments and textiles, gems and jewellery, engineering goods, petroleum products, transport equipment, spices, pharmaceuticals, and marine products. However, the main imports from the UK included precious and semi-precious stones, ores and metal scraps, engineering goods, chemicals and machinery. Both India and UK aim to reach bilateral trade amounting to $100 billion by 2030.
Experts said the FTA between India and the UK is expected to create employment opportunities, growth, and other opportunities for both countries. It is also expected to give a major boost to Indian exports in labour-intensive sectors, including leather, textile, jewellery, and processed agro products, among others.
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