New Delhi, Feb 3 (PTI) – After a temporary pause due to general elections in both nations, India and the United Kingdom are set to resume negotiations on their proposed Free Trade Agreement (FTA) from February 24, an official confirmed.
The UK’s Trade Minister is expected to visit New Delhi soon to push forward discussions on the trade deal, which has been in progress since January 2022. The 14th round of negotiations had stalled as both countries entered their respective election cycles.
The FTA aims to enhance bilateral trade and investment opportunities by reducing or eliminating customs duties on a wide range of goods. Additionally, it seeks to relax norms to facilitate trade in services and bilateral investments.
On the other hand, the UK is advocating for a reduction in import duties on products such as Scotch whiskey, electric vehicles, lamb meat, chocolates, and confectionery. Additionally, Britain seeks greater access to India's services sector, particularly in telecommunications, legal, financial services, banking, and insurance.
Apart from the FTA, both countries are also negotiating a Bilateral Investment Treaty (BIT). The proposed agreement covers 26 chapters, including trade in goods and services, investments, and intellectual property rights.
With discussions set to restart this month, both nations are expected to push for an agreement that benefits businesses and investors on both sides.
The UK’s Trade Minister is expected to visit New Delhi soon to push forward discussions on the trade deal, which has been in progress since January 2022. The 14th round of negotiations had stalled as both countries entered their respective election cycles.
The FTA aims to enhance bilateral trade and investment opportunities by reducing or eliminating customs duties on a wide range of goods. Additionally, it seeks to relax norms to facilitate trade in services and bilateral investments.
Key Trade Demands
Indian industries are keen on securing better access for skilled professionals, particularly in the IT and healthcare sectors, within the UK market. They are also pushing for duty-free market access for several goods.On the other hand, the UK is advocating for a reduction in import duties on products such as Scotch whiskey, electric vehicles, lamb meat, chocolates, and confectionery. Additionally, Britain seeks greater access to India's services sector, particularly in telecommunications, legal, financial services, banking, and insurance.
Boost from India’s Insurance FDI Reforms
The ongoing negotiations could gain momentum following Finance Minister Nirmala Sitharaman’s announcement in the Union Budget 2025-26. The minister proposed raising the foreign direct investment (FDI) limit in the insurance sector from 74% to 100%, a move expected to encourage foreign participation in India’s financial landscape.Apart from the FTA, both countries are also negotiating a Bilateral Investment Treaty (BIT). The proposed agreement covers 26 chapters, including trade in goods and services, investments, and intellectual property rights.
Growing Bilateral Trade
The India-UK trade partnership has been witnessing steady growth. Bilateral trade between the two nations increased to $21.34 billion in 2023-24 from $20.36 billion in the previous fiscal year.With discussions set to restart this month, both nations are expected to push for an agreement that benefits businesses and investors on both sides.
