With a new government in place in Britain, senior officials from India and the UK will hold the next round of talks for the proposed free trade agreement this month to settle outstanding concerns and conclude the negotiations. India-UK talks on a prospective free trade agreement (FTA) commenced in January 2022. The 14th round of talks halted as the two countries entered their general election cycles.
Keir Starmer, Britain’s newly elected Prime Minister, called Prime Minister Narendra Modi and stated that he was ready to finalize an FTA that would benefit both sides. The two leaders pledged to work together to achieve an early conclusion of a mutually beneficial India-UK free trade agreement. There are outstanding concerns in both the products and service industries.
The Indian business is demanding more access to the UK market for its qualified workers from areas such as IT and healthcare, as well as market access for a variety of commodities with no customs duties.
On the other hand, the UK is requesting a significant reduction in import levies on scotch whiskey, electric vehicles, lamb meat, chocolates, and some confectionary items.
Britain is also searching for new prospects for UK services in Indian markets, such as telecommunications, legal, and financial services (banking and insurance). The two nations are also discussing a bilateral investment treaty (BIT). The agreement contains 26 chapters covering products, services, investments, and intellectual property rights. India-UK bilateral trade climbed to USD 21.34 billion in 2023-24, up from USD 20.36 billion in 2022-23.
It has advised that India prioritize two concerns in the pact: The Carbon Border Adjustment Measure (CBAM) and non-traditional issues such as labour, environment, gender, and intellectual property rights. India has opposed including these themes in FTAs because they frequently necessitate domestic policy changes. Indian exports may still need to meet severe UK sustainability rules, which could harm Indian exports, particularly in labour-intensive sectors.