India-UK free trade agreement | Next round of talks expected soon
The Hindu - 14 November 2023
India-UK free trade agreement | Next round of talks expected soon
Chief negotiators of India and the U.K. are expected to soon hold next round of talks for the proposed free trade agreement to iron out differences on issues such as automobiles, medical devices, and movement of professionals, an official said.
The official said that the U.K. team may come to New Delhi for the 14th round of negotiations so that the talks can be concluded at the earliest.
"Virtual sessions are progressing. But we are planning for a full fledged round of talks. In the full round, both sides discuss all the chapters. Some 60-70 sessions happen parallelly," the official, who did not wish to be named, said.
Issues which need resolution include rules of origin; intellectual property rights (IPRs); social security agreement; duty concessions on electric vehicles, scotch whiskey, lamb meat, chocolates and certain confectionary items; liberalisation of norms in services sectors like banking and insurance.
Talks are also progressing on the proposed bilateral investment treaty (BIT).
The investment treaty is being negotiated as a separate agreement between India and the U.K..
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These investment treaties help in promoting and protecting investments in each other’s country. The main point of contention involved in this pact is about the mechanism for the settlement of disputes.
BITs help in promoting and protecting investments in each other’s countries.
India has proposed to first utilise all local judicial remedies for settlement of disputes before initiating an international arbitration.
India and the U.K. launched the talks for free-trade agreement (FTA) in January 2022, with an aim to conclude talks by Deepavali (October 24, 2022), but the deadline was missed due to political developments in the U.K.
There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights.
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.
On the other hand, the U.K. is seeking a significant cut in import duties on goods such as scotch whiskey, automobiles, lamb meat, chocolates and certain confectionary items.
Britain is also looking for more opportunities for U.K. services in Indian markets in segments like telecommunications, legal and financial services (banking and insurance).
The bilateral trade between India and the U.K. increased to $20.36 billion in 2022-23 from $17.5 billion in 2021-22.
The ’rules of origin’ provision prescribes minimal processing that should happen in the 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.
