The FTA talks between India and the UK began on January 13, 2022.
Up until December 2023, a total of 13 rounds of negotiations were conducted. When the UK side put a halt to negotiations in May 2024 because to elections in that nation, the 14th round had already started on January 10, 2024.
The goal of the agreement is to increase bilateral investments and commerce.
Under these agreements, customs taxes on the maximum amount of goods exchanged between two nations are either eliminated or drastically reduced. They also loosen regulations to encourage bilateral investments and trade in services.
In addition to market access for a number of items at zero customs tax, the Indian industry is calling for increased access to the UK market for its highly qualified people from industries including IT and healthcare.
However, the UK is requesting a large reduction in import taxes on products like lamb meat, electric cars, scotch whiskey, chocolates, and some confections. Additionally, Britain is searching for additional prospects for UK services in Indian markets in areas such as banking, insurance, legal services, and telecommunications. Additionally, a bilateral investment treaty (BIT) is being negotiated between the two nations.
The agreement covers intellectual property rights, investments, goods, and services in 26 chapters. India and the UK’s bilateral trade grew from USD 20.36 billion in 2022–2023 to USD 21.34 billion in 2023–2024. In the UK, the average duty on products imported from India is 4.2%.
The pact would help goods including textiles, clothing (shirts, pants, women’s dresses, bed linen), footwear, carpets, automobiles, marine products, grapes, and mangoes, according to economic think tank GTRI. These goods are subject to comparatively low to moderate tariffs in the UK.
While shirts, pants, women’s outfits, and bed linens are subject to tariffs ranging from 10% to 12%, yarn and fabric are subject to 4% duties. Comparably, footwear levies range from 4% to 16%, while purses and trunk cases are subject to 8% customs.
In 2022–2023, the UK sent USD 374 million worth of Scotch and other alcoholic beverages to India, along with USD 2.7 billion worth of precious metals.
The sixth-largest investor in India is the United Kingdom. Between April 2000 and September 2024, the nation received USD 35.3 billion in foreign direct investment.