India and U.K. Gear Up for Next Round of Talks on Proposed Free Trade Agreement, Resolving Key Issues and Boosting Trade Opportunities

 The chief negotiators of India and the U.K. are preparing to hold the next round of talks for the proposed free trade agreement (FTA). The discussions will focus on resolving issues such as automobiles, medical devices, and movement of professionals. The U.K. team is expected to visit New Delhi for the 14th round of negotiations, aiming to conclude the talks as soon as possible. While virtual sessions have been ongoing, both sides are planning a full-fledged round of talks. During these comprehensive discussions, all chapters of the agreement will be addressed simultaneously in around 60-70 sessions.

Key issues requiring resolution include rules of origin, intellectual property rights (IPRs), social security agreement, and duty concessions on items like electric vehicles, scotch whiskey, lamb meat, chocolates, and certain confectionery goods. Additionally, there will be a focus on liberalizing norms in the banking and insurance sectors. Simultaneously, progress is being made on the proposed bilateral investment treaty (BIT) between India and the U.K. These agreements aim to promote and protect investments in each other's countries. However, the main point of contention in the BIT negotiations revolves around the mechanism for settling disputes. India has proposed utilizing local judicial remedies before initiating international arbitration.

The talks for the FTA between India and the U.K. were launched in January 2022, with the goal of concluding by Diwali in October 2022. However, the deadline was missed due to political developments in the U.K. The agreement consists of 26 chapters covering goods, services, investments, and intellectual property rights. The Indian industry is demanding greater access for skilled professionals, particularly in the IT and healthcare sectors, in the U.K. market. They also seek market access for various goods with zero customs duties.

On the other hand, the U.K. is seeking significant reductions in import duties for items such as scotch whiskey, automobiles, lamb meat, chocolates, and confectionery goods. Furthermore, Britain is eager to explore opportunities for its services in Indian markets, particularly in telecommunications, legal, and financial services. The bilateral trade between India and the U.K. has seen growth, reaching $20.36 billion in 2022-23 compared to $17.5 billion in the previous fiscal year. One crucial provision under discussion is "rules of origin," which outlines the minimal processing required in the FTA country for a product to be considered originating goods.

This provision prevents the dumping of goods into the Indian market by requiring a prescribed value addition in products exported to India. It ensures that countries with an FTA agreement with India cannot simply label goods from a third country and sell them in the Indian market. The upcoming talks aim to address these various issues and pave the way for a successful free trade agreement between India and the U.K., expanding trade opportunities and fostering economic cooperation between the two nations.