India, UK working to iron out issues on IPRs, rules of origin under FTA

India and the UK are working to iron out differences on issues like intellectual property rights (IPRs) and rules of origin under the free trade agreement being negotiated by the two countries, a top government official said on Friday.

The 11th round of talks is underway in the UK for the agreement. Negotiations for the trade agreement started in January 2021.

Commerce Secretary Sunil Barthwal said that out of 26 chapters in the agreement, 14 have been closed. In five chapters there are certain important contentious issues pertaining to environment, labour, and digital trade.

This agreement is the "most complex" one which will be going to be signed by India, he told reporters here.

"UK will be the first with which we are going to have a comprehensive FTA which we have not signed with any other developed country as such," he added.

There are some differences with respect to IPR and rules of origin (ROO).

"In services also, there are few issues...So we are working on those issues. Hopefully, we will be able to close it and move," he added.

The 'rules of origin' provision prescribes minimal processing that should happen in the FTA country so that the final manufactured product may be called originating goods in that country.

Under this provision, a country that has inked an FTA with India cannot dump goods from some third country in the Indian market by just putting a label on it. It has to undertake a prescribed value addition in that product to export to India. Rules of origin norms help contain dumping of goods.

The commerce ministry has recently stated that the India-UK talks for a free trade agreement have reached a "critical stage".

Commerce and Industry Minister Piyush Goyal was in London from July 10-12 for the FTA Talks.

The negotiations between the two countries for the agreement cover as many as 26 policy areas/chapters. Investment is being negotiated as a separate agreement (bilateral investment treaty) between India and the UK and it would be concluded simultaneously with the free trade agreement.

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 whisky. Britain is also looking for more opportunities for UK services into the Indian markets.

The bilateral trade between the countries has increased to USD 20.36 billion in 2022-23 from USD 17.5 billion in 2021-22.

India's main exports to the UK are ready-made garments and textiles, gems and jewellery, engineering goods, petroleum and petrochemical products, transport equipment, spices, machinery and instruments, pharmaceuticals and marine products.

The main imports include precious and semi-precious stones, ores and metal scraps, engineering goods, professional instruments other than electronics, chemicals and machinery.

In the services sector, the UK is the largest market in Europe for Indian IT services.

In the field of investment, the UK is one of the top investors in India. In 2022-23, India received USD 1.74 billion in foreign direct investment from Britain as against USD one billion in 2021-22. During April 2000 and March 2023, the investments stood at USD 33.9 billion.

Under such pacts, two trading partners significantly reduce or eliminate customs duties on the maximum number of goods traded between them, besides easing norms to promote trade in services and investments.

Britain, which has a USD 3.1 trillion economy according to World Bank data, has long been a service sector powerhouse. The city of London, which is one of the world's biggest financial markets, has also long attracted Indian companies seeking to raise funds from the global market.