Team Blitz India
NEW DELHI: The Free Trade Agreement (FTA) talks between India and the UK are likely to inch in a positive direction after several rounds of deliberations and uncertainty in the wake of the EU-style carbon border adjustment mechanism (CBAM).
Earlier this week, the progress of the agreement, which has reached its final stage, was reviewed by Commerce and Industry Minister Piyush Goyal and UK Secretary of State for Business and Trade Kemi Badenoch in Osaka, Japan.
The fact that the talks around the FTA began in October 2022 and are still being anchored with the same sense of urgency and importance speaks volumes about the criticality of trade between the two countries. And the data speaks for itself. According to the latest official data, India enjoys a positive trade balance with the U.K., which stood at $2.44 billion in FY23.
Furthermore, the UK Government’s export trade with India (imports for India) till the period ending March 2023 recorded a total value of £8.1 billion ($9.82 billion) and £6.7 billion. Similarly, the total value of all UK imports (exports from India) was £10.5 billion ($12.7 billion) and £11.0 billion ($13.3 billion) in goods and services, respectively, for the same period, states the Department of Business and Trade, UK.
The FTA was one of the key talking points between Indian Prime Minister Narendra Modi and his UK counterpart, Rishi Sunak during the recently concluded G20. Both the ministers agreed to expedite the process, which faced some roadblocks as the UK was considering imposing a carbon tax akin to the European Union’s policy. The proposal was to levy steep tariffs on imports with higher carbon footprints.
However, the recently concluded negotiations between senior officials of India and the UK are being seen as a critical step towards bridging the differences on issues such as rules of origin and the services sector. Both ministers, in consultation, are working towards concluding the talks for the proposed FTA as soon as possible.
There are 26 chapters in the agreement, which include goods, services, investments, and intellectual property rights. An investment treaty is also being negotiated as a separate agreement between India and the UK.
