India and United Kingdom (UK) are going the extra mile to resolve their differences in a bid to close negotiations over the proposed bilateral free trade agreement (FTA) at the earliest, though sealing the deal before the Lok Sabha elections looks difficult, according to a government official.
"Both the sides are looking to close the deal as soon as possible, however, since differences over market access remains, sealing FTA negotiations before the general elections in India seems unlikely," the official admitted.
The UK-India Business Council (UKIBC) on November 20 said the FTA negotiations should conclude before the elections due in both the nations. UKIBC Managing Director Kevin McCole said that though the election date in the UK has not yet been fixed, the polls may be held between May and November 2024, while India is going to polls around April-May this year. There is a risk that the talks may have to pause till the elections in India and the UK are over, he added.
A British delegation has arrived in New Delhi to meet commerce ministry officials to accelerate the process. "The UK delegation should be here for around a week. The discussions are likely to focus on chapters pertaining to goods and services," this official said, adding that issues around "cars and medical devices" need to resolved.
The visit of the British delegation comes close on the heels of an Indian team's trip to London, led by Commerce Secretary Sunil Kumar Barthwal late last month, to sort out disagreements over certain aspects of market access.
One of the sticking points between the two sides continues to be London's reluctance over New Delhi's stand that British automakers have to step up the utilisation of local components in their vehicles to 45 percent to avail of concessions in India.
The government has been weighing Tariff Rate Quotas (TRQ) to meet the UK's demand for a lower import levy on electric vehicles from Britain as part of the trade deal. The call for a similar cut on British whiskey too awaits a resolution.
A tariff rate quota allows a lower tariff rate on imports of a given product up to a specified quantity. New Delhi is said to be considering a concessional tariff of 30 percent on 2,500 electric vehicles imported annually from the UK with price tags above $80,000.
This official said that most of the topics pertaining to rules of origin have been closed, barring one or two issues.
Majority of the chapters in the India-UK FTA are either closed or are at advanced stages of negotiations, the commerce ministry said on February 15.
Negotiations between the two nations began on January 2022 with the projected launch of the FTA around Diwali 2022. There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights. So far, 14 round of talks have been conducted between the two sides.
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