SUKUMAR SAH
THE much-anticipated Free Trade Agreement (FTA) between India and the United Kingdom – stalled for over two years in the midst of political shifts and economic uncertainties – was brought back into the focus with British Business and Trade Secretary Jonathan Reynolds meeting his Indian counterpart Piyush Goyal in New Delhi on February 24 and kick-starting the two-day discussions. The latest round of talks has been marked by a renewed sense of urgency and ambition as both nations work to iron out the differences and finalise a mutually beneficial agreement.
“Advancing the negotiations and ensuring a balanced, ambitious, and mutually beneficial deal remains our top priority,” remarked India’s Commerce and Industry Minister Goyal. His British counterpart echoed the sentiment, stating, “Growth will be the guiding principle in our trade negotiations with India, and I’m excited about the opportunities in this vibrant market.” For India, these talks come at a critical juncture – with the US President Donald Trump imposing reciprocal tariffs on imports from multiple countries, including India, diversifying trade partnerships has become a strategic necessity.
The risk of a dip in Indian exports has reinforced the urgency of securing alternative markets. The UK, with its strong trade ties and historical connections to India, is a natural partner in this endeavor. The United Kingdom, too, has a vested interest in sealing this deal. As part of its post-Brexit strategy, the UK has been aggressively pursuing independent trade agreements with large markets. India, with its fastgrowing economy, presents a lucrative opportunity.
Strengthening economic ties with India would help the UK reduce its reliance on the European Union. At present, India-UK bilateral trade stands at an impressive £41 billion ($52 billion), but both nations recognise the immense potential for growth. India has set an ambitious target of growing its exports to $1 trillion by FY30.
Securing an FTA with the UK is seen as a pivotal step in achieving that goal. The agreement would provide Indian exporters with better access to British markets, particularly in sectors like textiles, IT services, pharmaceuticals, and agriculture.
Easing visa norms
One of India’s key demands in the negotiations is the relaxation of visa norms for its professionals and students. Easier mobility to the UK would not only benefit India’s skilled workforce but also strengthen the academic and professional exchange between the two countries.
The UK is pushing for lower duties on whiskey and luxury cars, while India is keen on protecting its domestic auto and dairy industries. Additionally, the UK seeks greater access to India’s financial services sector, but India is proceeding with caution.
Intellectual property rights and data protection laws have further complicated matters. India’s preference for local data storage requirements is another sticking point. Despite these challenges, both nations remain committed to making progress. If successfully negotiated, the FTA could unlock significant trade opportunities.
