UK and India Accelerate Free Trade Agreement Negotiations
The United Kingdom and India have entered the final phase of negotiations for a landmark Free Trade Agreement (FTA), aiming to enhance bilateral trade, generate employment, and stimulate investments. This development follows a period of halted discussions due to general elections in both countries.
Key Objectives of the FTA
United Kingdom’s Goals: The UK seeks reduced tariffs on major exports, including automobiles, premium whisky, and food products. These reductions are intended to make British goods more competitive in the Indian market.
India’s Goals: India is advocating for improved visa policies to facilitate the movement of professionals and students to the UK. Additionally, India seeks a social security agreement for its workers in the UK and exemptions from the UK’s impending carbon tax.
Current Trade Landscape
As of September 2024, bilateral trade between the UK and India reached £41 billion ($52 billion).
The proposed FTA aims to eliminate existing trade barriers, thereby promoting foreign direct investment (FDI) in critical sectors such as technology, pharmaceuticals, and financial services.
Anticipated Benefits
For India: The agreement is expected to bolster India’s manufacturing sector by providing access to advanced technologies and capital. This could lead to job creation and enhanced production capabilities.
For the UK: Post-Brexit, the UK is seeking to establish strong trade relationships outside the European Union. A successful FTA with India would diversify its trade portfolio and open avenues in one of the world’s fastest-growing economies.