India’s services exports to the UK in 2022 stood at $12.7 billion while imports were $8.59 billion.
The UK has demanded national treatment for its services businesses and greater freedom to its professionals to operate in India during negotiations on the bilateral Free Trade Agreement. New Delhi, on its part, has asked for similar concessions on reciprocal basis, a senior official said.
National treatment means treating foreigners and locals equally with regard to rules and regulations. It also means equal access to opportunities for overseas operators and not doing anything that puts them at a disadvantage.
The areas of services that the UK is interested in are financial, business and professional, and transport services. It also wants a liberalised visa regime for its business travellers to give them greater opportunities to operate in India.
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“The UK is an important financial services centre of the world, so they always have interest in that. Talks are going at a high level but nothing firmed up so far. Both sides have exchanged the list of services where they are keen to promote exports,” the official, who did not wish to be identified, said.
“There are no tariffs involved in services trade negotiations, the talks are on issues of access to market,” he added.
The Indian government regulates foreign participation in the financial sector by putting Foreign Direct Investment (FDI) limits and other conditions of ownership and control. Regulators like Reserve Bank of India also put conditions on the management and control of entities where foreign investment has come in.
“Services sector FDI are also part of the discussion. Regular meetings are held at higher levels to review the progress, resolve the outstanding issues and discuss the way forward in negotiations. So far nothing has firmed up in the services sector,” the official said.
India’s services exports to the UK in 2022 stood at $12.7 billion while imports were $8.59 billion.
The UK is the biggest market for India’s IT exports after the US and India has been seeking liberalised visa norms for skilled workers in IT and other sectors. From the UK side its stated objective to preserve the integrity of UK immigration debate weighs on negotiations on areas in services of interest to India .
Till now 10 rounds of negotiations have been held on India-UK FTA. The negotiations are happening over 26 policy areas or chapters. Fourteen chapters/policy areas have been closed for negotiations and significant progress has been made in others. “Both sides aim to conclude negotiations at the earliest,” the official said.
Along with FTA, both India and UK are negotiating an investment agreement, Bilateral Investment Treaty. This treaty will be concluded simultaneously with the FTA.
Source:financialexpress.com