India-UK Free Trade talks, initiated in January 2022, missed Diwali 2022 deadline due to UK political developments.
In January 2022, the wheels were set in motion for the Free Trade Agreement (FTA) between India and Britain. The expected grand finale was slated for Diwali 2022, yet here we are, well past Diwali 2023, and the deal is nowhere in sight. The complexities within Britain’s political arena, coupled with a myriad of unfavourable conditions, are cast as the culprits for this prolonged delay.
As stated by Commerce Secretary Sunil Barthwal to the Economic Times on November 15, both India and Britain operate sans any set timeframe or deadline for concluding the FTA. The reason? The issues at hand are ‘complex,’ holding immense economic significance for both nations.
What is a Free Trade Agreement?
A Free Trade Agreement is the pass shared between two or more countries, designed to dismantle barriers hindering the smooth flow of goods and services. Think quotas, tariffs, subsidies, or prohibitions – these are the puzzle pieces shaping the import-export dynamics.
What will be India’s Benefit from this Agreement?
By the end of Q2 2023, India was the 12th largest trading partner in the four quarters, contributing 2.1% to the total UK trade. £16.0 billion exported to the UK, and £22.3 billion imported. Both nations harbour ambitions of fueling economic growth by resolving trade dilemmas through the FTA.
Why the delay in the agreement between India and Britain?
With 26 chapters to navigate, spanning goods, services, investments, and intellectual property rights, 13 rounds of discussions have been completed. Yet, the bickering continues, with automobiles, medical devices, and professional services acting as the battleground.
As per PTI, echoed by the Economic Times, Indian industries, particularly IT and healthcare, clamour for increased opportunities for their professionals in the UK. Simultaneously, the UK pushes for reduced import duties on scotch whisky, automobiles, lamb meat, chocolates, and more, eyeing expansion in Indian markets, notably in telecommunications, legal, and financial services.
Imminent discussions between key negotiators of India and Britain are poised to address myriad issues in the upcoming round. The UK team anticipates their arrival and is eager to seal the deal. Meanwhile, talks on the proposed Bilateral Investment Treaty (BIT) are progressing steadily.
That’s it for today. We hope you’ve found this article informative. Remember to spread the word among your friends. Until we meet again, stay curious!
*The article is for information purposes only. This is not an investment advice.