UK Official Urges India to Open Up for FTA

20 Feb, 2024

UK Official Urges India to Open Up for FTA

With the general election dates in India looming and the onset of the Model Code of Conduct (MCC), the UK continues to advocate for a more extensive opening of the Indian economy as part of the ongoing negotiations for a free trade agreement (FTA). The signing of the FTA is unlikely to occur before the elections due to the MCC deadline, potentially complicating matters further as the UK is also approaching its own elections later in the year. Nevertheless, negotiations are vigorously underway to address remaining points of contention, with a review of the FTA's progress conducted by the Prime Minister’s Office (PMO) on February 16, attended by Commerce and Industry Minister Piyush Goyal and Commerce Secretary Sunil Barthwal.

A UK government official, speaking anonymously to The Indian Express, emphasized the importance of India's further openness, given its high tariff status compared to the UK. India's tariff regime has been a concern for trade partners due to its high import tax rates, contrasting with the UK's relatively open stance. The FTA with the UK holds significance as it marks India's first comprehensive deal with a Western nation, fostering deeper economic integration with a leading global service sector. It serves as a template for future agreements with larger Western trade partners like the European Union and the European Free Trade Association (EFTA), particularly crucial as the global supply chain undergoes restructuring post-COVID-19. Thirteen rounds of talks have been completed, with discussions ongoing on issues such as customs duty cuts on electric vehicles and whiskey, movement of professionals, and a proposed bilateral investment treaty (BIT).

Originally aimed for signing by Diwali 2022, the India-UK FTA saw bilateral trade between the two countries increase to $20.36 billion in 2022-23 from $17.5 billion in 2021-22