The conclusion of negotiations on the trade pact missed the deadline of October last year.
After long delays and several missed deadlines, negotiations on the India-UK free trade agreement (FTA) is set to get a leg-up, with commerce and industry minister Piyush Goyal’s two-day visit to the island nation beginning today.
According to a senior official, major headway was made in the negotiations, prior to the visit. “Of the 26 policy areas under discussion, 14 chapters have been substantially closed for negotiations and significant progress has been made in other chapters,” he said.
The minister’s visit follows British Prime Minister Rishi Sunak’s statement last month, reaffirming his commitment to a “truly ambitious” FTA with India and indicating his plans to push for an early deal during his visit to New Delhi for the G20 Summit in September.
The conclusion of negotiations on the trade pact missed the deadline of October last year. No new deadline has been set but officials say that, “both sides aim to conclude negotiations at the earliest.”
India-UK negotiations on FTA had started in January 2021.
Goyal will also be meeting ministers of member countries of the European Free Trade Association (EFTA) to discuss the progress of the Trade and Economic Partnership Agreement, which is under negotiations, a government statement said on Sunday. EFTA includes Switzerland, Norway, Iceland, and Liechtenstein.
The 11th round of official-level talks on India-UK FTA is scheduled for this month. In the 10th round detailed negotiations were held across 10 policy areas which included detailed draft text treaty discussions in these policy areas.
“Along with official-level talks regular meetings are held at the higher level to review the progress, resolve the outstanding issues and discuss the way forward in negotiations,” the official said.
The minister’s visit to the UK comes just after the conclusion of the 10th round of FTA talks last month, and both sides insisting on “equal treatment” in services market for the their respective companies.
During the visit, Goyal will engage in high-level meetings with his UK counterparts, including the Secretary of State for International Trade, as well as representatives from various sectors and industries.
“These meetings will provide an opportunity to discuss the key priorities and objectives of the FTA negotiations, with a focus on addressing trade barriers, promoting investments, and fostering greater cooperation in areas such as technology, innovation, and intellectual property rights,” it said.
Investment is being negotiated as a separate agreement with the UK. The Bilateral Investment Treaty will be concluded simultaneously with India-UK FTA.
India’s merchandise exports to the UK increased 9.03% on year in 2022-23 to touch $ 11.4 billion while imports rose 27% to $8.9 billion. FDI from the UK stood at $1.7 billion in FY23 as against $1.6 billion in the previous year. India’s main exports to the UK are ready-made garments and textiles, gems and jewellery, engineering goods, petroleum and petrochemical products, transport equipment, spices, machinery and instruments, pharmaceuticals and marine products.
The main imports from the UK include precious and semi-precious stones, ores and metal scraps, engineering goods, professional instruments other than electronics, chemicals and machinery.
The key reason for missing the October 2022 deadline was the leadership change in the UK. In the negotiations, the UK is asking India to lower duties on automobiles, wine and spirits, and high-end dairy products.
In services UK is seeking concessions is telecom sector Automobiles have been one of the sensitive areas of discussion for India as it wants to offer protection to the sector that accounts for 50% of manufacturing. On dairy, the concerns are around the livelihoods of small farmers. India on its part is seeking lower duties for its traditional exports like readymade garments, leather, textiles, food items, gems and jewelry.
Another demand of India in the talks is for easier assess for professionals to the UK market. This is a sensitive political issue in UK.
Last meeting with EFTA, which includes countries not part of the European Union, was held in May. At the meeting it was agreed to increase the frequency of meetings to wrap up negotiations on the trade agreement at the earliest.
In the last financial year that ended on March 31, 2023, India’s exports to the EFTA bloc was $1.7 billion while imports stood at $15 billion. The huge trade balance in favour of EFTA is due to the presence of Switzerland in the block. India’s imports from the block include pharma products, organic chemicals, and optical, medical and surgical instruments.
Another major import from Switzerland is gold as the country is home to many refineries.
Source:financialexpress.com