India-UK FTA: Tenth round of negotiations conclude

Prime Minister Narendra Modi with his British counterpart Rishi Sunak. The initial deadline for completion of the negotiations was aimed for Diwali last year.

The 10th round of India-UK free trade agreement (FTA) negotiations has concluded, with 14 of the total 26 chapters being “substantially closed” so far, commerce ministry officials said on June 15.

“India and UK FTA negotiations as moving ahead. Both countries are working to resolve outstanding issues and conclude negotiations at the earliest,” Nidhi Mani Tripathi, Joint Secretary at Department of Commerce, who is heading the negotiations, said at a press briefing in Delhi.

Negotiations on the India-UK Free Trade Agreement (FTA) have merely crossed the halfway point, and India has missed its internal deadline of closing the talks by March 2023. Of the 26 chapters to be negotiated, only 14 have been closed so far.

“Issues with respect to labour, environment, and rules of origin had been topics of discussions. Both parties are coming closer on these negotiations. We expect the negotiations to become easier moving ahead,” an official speaking on side-lines of the briefing told reporters on condition of anonymity.

A UK House of Commons report recently held that India’s insistence on data localisation is a major stumbling block to a free trade agreement. The UK has been demanding free data flow between the two countries.

Issues related to visa, carbon tax and Indian tariffs on automobile shipments have also been issues of contention between the two.

India and the UK have been negotiating an FTA since January last year, with a goal towards a comprehensive pact that is expected to significantly enhance the bilateral trading relationship between the two countries. The initial deadline for completion of the negotiations was aimed for Diwali (October 24) last year.

India’s merchandise exports to the UK totalled $10 billion during April 2022 to February 2023, with a share of 2.5 percent of total exports. Merchandise imports from the UK stood at $8 billion during this period, with a share of 1.3 percent of all imports, data from the Ministry of Commerce and Industry showed. In terms of total trade, the UK was India’s 15th top trade partner during this period.

Through the agreement, India stands to boost its exports of pharmaceuticals, textiles, food and beverages, tobacco, leather and footwear, and agricultural items like rice to the UK, and raise prospects for digital services. The UK seeks access for its chemicals, motor vehicles, electrical equipment, medical devices and spirits.