India and the United Kingdom are set to resume its negotiation early next year where the both countries are expected to reconcile their differences over the proposed free trade agreement or FTA, which has been stalled for months.
The resumption in trade talks would pave way for several unfinished agenda of the deal ranging from goods, services, investments, and intellectual property rights.
Under the proposed FTA, India’s demand for greater access in terms of work visas for its skilled professionals in IT and healthcare sectors in the UK market, besides market access for several goods at nil customs duty.
Mineral fuels, machinery, and precious stones, pharmaceuticals, apparels, iron and steel and chemicals lead India’s export basket to the UK, contributing a 68.7% share of total exports.
While UK is looking at significant cuts in import duties on goods such as whiskey, EVs, lamb meat, chocolates and certain confectionary items. It is also looking to promote UK companies in Indian telecom, legal and financial industries.
India is also expected to show its reservations on the carbon border adjustment mechanism, or CBAM, which has the potential of negating trade deal benefits against high carbon taxes.
Both parties are hopeful about the possibility of a speedy resolution given the progress that has already been achieved in the negotiations.
The revival of negotations came about as Prime Minister Narendra Modi and UK Prime Minister Keir Starmer met on the sidelines of the G20 Summit in Rio de Janeiro, Brazil.
The talks between India-UK talks for the proposed FTA began in January 2022, and had reached the 14th round of negotiations in May 2024, when talks were paused as both nations entered their general election cycles.
As per the latest data from April to September 2024, India’s exports to the UK witnessed a robust growth of 12.4%, reaching $7.3 billion, compared to $6.5 billion during the same period in 2023.
“The United Kingdom is a priority country for the achievement of our ambitious $1 trillion export target by FY30, with our exports to the UK expected to reach $30 billion by 2029-30,” the Department of Commerce said in a statement.
