A senior government official said on Friday that India and the UK are “very close” to finalising talks for a planned free trade agreement as both sides work to resolve disputes on matters like investment treaty, intellectual property rights (IPRs), and rules of origin.
The official added that although there is broad agreement on issues relating to cars and alcoholic beverages, “nothing is agreed until everything is agreed.”
Recently, the 11th round of negotiations came to an end. Piyush Goyal, the minister of commerce and industry, and Sunil Barthwal, the secretary of commerce, visited London during that round to assess the negotiations.
The official radiated assurance that the talks would be finished this year.
The person continued, “We are really close and working to wrap up the discussions as soon as we can.
19 of the 26 FTA chapters have been closed out of the total.
IPRs, rules of origin, and investment treaties are among of the unresolved challenges, the source continued.
Both nations discuss product-specific rules, value addition, changing the chapter header, and certification in the rules of origin chapters.
“The UK will be the first country with which we are going to have a comprehensive FTA, which we have not signed with any other developed country as such,” the official said.
The ‘rules of origin’ section specifies the minimum amount of processing that must take place in an FTA country before the final produced good can be referred to as originating in that country.
According to this clause, a nation that has signed an FTA with India is not permitted to merely label goods imported from a third country and dump them on the Indian market. In order to export the goods to India, it must add a specific amount of value. Rules of origin regulations aid in preventing product dumping. Up to 26 policy areas/chapters are the subject of the agreement’s negotiations between the two nations.
Investment is being discussed as a separate deal (bilateral investment treaty) and would be signed concurrently with the free trade agreement between India and the UK.
The two countries last year missed the deadline due to unprecedented economic and political crises in the UK.
The Indian industry is demanding greater access for its skilled professionals in the UK market and entry of Indian whiskey by removal of conditions pertaining to the three-year minimum maturation period.
The UK is also seeking a significant cut in the import duties on Scotch whiskey. The nation is also looking for more opportunities for UK services into Indian markets.
From $17.5 billion in 2021–2022 to $20.36 billion in 2022–2023, the two nations’ bilateral trade grew. Ready-made clothing and textiles, diamonds, jewellery, engineering products, petroleum and petrochemical products, transport equipment, spices, machinery and instruments, medicines, and marine products are among India’s top exports to the UK.
Precious and semi-precious stones, ores, scrap metal, engineering products, non-electronic professional equipment, chemicals, and machinery are among the principal imports. The UK is the biggest market in Europe for Indian IT services in the services industry. The UK is one of the leading foreign investors in India’s financial sector.
