Rickin Sanklecha, Pune
India and the UK are expected to sign a free trade agreement (FTA) at the end of this month. It will be India’s first major deal with an industrialised nation. The expectation with the deal is to boost bilateral trade which is currently approximately 20 Billion Dollars.
An FTA is a pact between two countries and often includes lower tariffs, subsidies, and policies that not only not inhibit but incentivise trade.
India has invited the UK Prime Minister Rishi Sunak to finalise it. Sunak will be coming to India on October 28th. The pact consists of 26 chapters. There are some ongoing discussions on matters such as rules of origin and intellectual property rights.
Sunak has reiterated his commitment to strengthen India-UK ties across different sectors, including an FTA.
UK-India bilateral trade was worth an approximate 36 billion pounds in 2022 according to the Department for Business and Trade UK.
A 30-member official delegation from the UK started the next round of negotiations for an FTA with the Indian team here on Monday. They are working on closing remaining issues so that the talks can be concluded, an official has said. They have recently concluded the 13th round of negotiation which was led by Commerce Secretary Sunil Barthwal in London as reported by the PTI.
The ‘rules of origin’ provision prescribes minimal processing should happen in the FTA country. This results in the other country being able to refer to the goods as home originated.
This provision also means that the UK cannot dump goods from another country by just labelling them in the UK. They have to add some value to the product to export it to India.
The bilateral trade increased to USD 20.36 billion in FY22 versus USD 17.5 billion in FY21.