Negotiations between India and the United Kingdom for a proposed free trade agreement (FTA) are in full swing, with efforts being made to bridge differences on issues such as rules of origin and the services sector. A small Indian team is currently in London to iron out these differences, particularly regarding the rules of origin. Talks are also taking place on the proposed bilateral investment treaty, with progress already made on intellectual property rights.

🚨 India and UK are likely to sign a proposed free trade agreement (FTA) in the last week of this month. 🇮🇳🇬🇧 pic.twitter.com/MSPvG7yqqE

— Indian Tech & Infra (@IndianTechGuide) October 11, 2023

While there were initial reports suggesting that the agreement could be finalized by the end of this month, sources indicate that both countries are continuously engaging on the remaining differences, and it is advised to wait until these negotiations are over. Commerce Secretary Sunil Barthwal confirmed last week that the negotiations for the FTA are at an advanced stage, despite missing the initial deadline of October 2022 due to political developments in the UK. The FTA contains 26 chapters covering goods, services, investments, and intellectual property rights.

Most of these chapters have already been closed, and high-level engagements at various levels are ongoing to resolve any remaining issues. In addition, a separate agreement on the bilateral investment treaty is being negotiated, which aims to promote and protect investments in each country. The main point of contention in this pact is the mechanism for settling disputes, with India proposing to exhaust all local judicial remedies before resorting to international arbitration. The Indian industry is seeking greater access for skilled professionals from sectors like IT and healthcare in the UK market, along with market access for various goods at zero customs duties.

On the other hand, the UK is pushing for reduced import duties on goods such as scotch whiskey, automobiles, lamb meat, chocolates, and confectionery items. Additionally, Britain is looking for more opportunities for its services in Indian markets, particularly in telecommunications, legal, and financial services. Trade between India and the UK has been steadily increasing, reaching USD 20.36 billion in 2022-23, up from USD 17.5 billion in the previous year. Despite certain delays and differences between the two countries, officials are optimistic about the progress and are working towards reaching a mutually beneficial agreement.