India and the United Kingdom have completed the fifth round of negotiations for an India-UK Free Trade Agreement (FTA). The Ministry of Commerce and Industry announced this on Thursday in a press release. According to that, it was concluded last month.
According to the ministry, negotiation officials conducted these technical talks in a hybrid format, with some teams meeting in New Delhi, India, and the majority of officials participating virtually.
“On 29 July 2022, the Republic of India and the United Kingdom concluded the fifth round of talks for an India-UK Free Trade Agreement (FTA),” the Commerce Ministry said in a press release. See here.
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According to the release, technical experts from the countries met for the detailed draft treaty text discussions covering 15 policy areas for this round of negotiations.
Officials from India and the UK will keep up their rigorous work throughout the summer in order to meet our goal of having most of the negotiations for a comprehensive and equitable free trade agreement wrapped up by the end of October 2022.
In January of this year, India and the UK began talks on a free trade agreement. In order to provide immediate benefits for businesses on both sides, the two countries are looking into the possibility of an interim agreement.
Last month, Commerce Secretary BVR Subrahmanyam had informed that negotiations for a Free Trade Agreement (FTA) between India and the United Kingdom are on track and should be completed by the end of August.
Speaking to the media following the signing of two memorandums of understanding and a framework agreement with the UK, Subrahmanyam stated that the India-UK FTA negotiations would be completed by August 31 and that the agreement would be ready for signing at the convenience of the two leaders after receiving internal approval on both sides.
When asked about the impact of the change in government in the UK on the proposed FTA was minimal Subrahmanyam said; “Irrespective of the party in power in the UK, the logic of FTA with India is irreversible.”
India, UK Trade Relations
India and the United Kingdom have a modern partnership that is rooted in deep historical ties. India and the United Kingdom have cooperative relations in civil nuclear energy, space, defence, combating terrorism, economic ties, science and technology, education, and culture.
The UK supports India’s application for permanent membership in the United Nations Security Council (UNSC) and serves as a crucial conduit for India’s interests in the European Union (EU), Group of Eight (G-8), G20, and international arenas. See here.
Strong economic ties between India and the UK offer significant room for expansion in both the goods and services sectors. India and the UK’s bilateral relationship is primarily based on investment. The strong presence of the Indian community, represented by over 1.6 million expatriates who make up less than 2% of the UK’s total population but contribute more than 6% of its GDP, is crucial for fostering bilateral trade and investment. Major Indian corporations are present in the UK market, and new competitors are appearing more frequently.
The UK has also continued to be interested in researching the Indian market’s potential.
India-UK bilateral trade (both goods and services) stood at £25.7 billion in the four quarters to the end of Q1 2022, registering an increase of 35.2% or £6.7 billion from the four quarters to the end of Q1 2021. In the four quarters to the end of Q1 2022, India’s total imports from the UK amounted to £8.8 billion, while India’s total exports to the UK amounted to £16.9 billion. India was the UK’s 12th largest trading partner in the four quarters to the end of Q1 2022, accounting for 1.9% of the UK’s total trade.
The Joint Economic and Trade Committee (JETCO) between India and the United Kingdom and the Economic and Financial Dialogue (EFD) are the two primary bilateral institutional mechanisms. Numerous JWGs, including the India-UK Financial Partnership and the India-UK CEO’s Forum, support them.
