India, UK free trade agreement: 12th round of talks from Aug 7
As the negotiations for a proposed free trade agreement (FTA) between India and the UK are at the concluding stages, the 12th round of talks is scheduled to be held in Dehli from August 7, confirmed an official.
According to news reports, negotiators from both sides are looking to conclude the talks before the end of the year.
The main issues which could come up for discussions in this round include investment treaty, reduction of duties on auto and whiskey and matters pertaining to services, the official said.
The 11th round of talks was wrapped up last month. For that round, commerce and industry minister Piyush Goyal and commerce secretary Sunil Barthwal visited London and had taken stock of the negotiations.
Also read: Eager to secure trade deal with India, says UK’s Suella Braverman
The FTA
Out of the total 26 chapters in the FTA, 19 have been closed. Investment is being negotiated as a separate agreement (bilateral investment treaty) between India and the UK and it would be concluded simultaneously with the free trade agreement.
In the rules of origin chapters, product specific rules are being negotiated which include value-addition norms for each product category, change in chapter heading, and certification.
The rules of origin provision prescribes minimal processing that should happen in an FTA country so that the final manufactured product may be called originating goods in that country.
Under this provision, a country that has inked an FTA with India cannot dump goods from some third country in the Indian market by just putting a label on it. It has to undertake a prescribed value addition in that product to export to India. Rules of origin norms help contain dumping of goods.
The Indian industry is demanding greater access for its skilled professionals from sectors like IT, and healthcare in the UK market, besides market access for several goods at nil customs duties.
Also read: India, UK conclude second round of talks for proposed free trade agreement
What Britain wants
On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, automobiles, lamb meat, and certain confectionary items.
Britain is also looking for more opportunities for UK services into Indian markets in segments such as telecommunications, legal and financial services like banking.
Bilateral trade
The bilateral trade between the countries has increased to US$ 20.36 billion in 2022-23 from US$ 17.5 billion in 2021-22.
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.
Main imports include precious and semi-precious stones, ores and metal scraps, engineering goods, professional instruments other than electronics, chemicals and machinery.
In the services sector, the UK is the largest market in Europe for Indian IT services. In the field of investment, the UK is one of the top investors in India. In 2022-23, India received US$ 1.74 billion in foreign direct investment from the UK as against US$ 1 billion in 2021-22.
During April 2000 and March 2023, investments stood at US$ 33.9 billion. Under such pacts, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services and investments.
(With inputs from agencies)
