UK for India-EU FTA

The United Kingdom today mooted a free trade agreement between India and the European Union.

The proposal was made by the visiting UK Minister of State for Trade Ian Pearson at a meeting with Commerce and Industry Minister Kamal Nath.

The visiting minister also pitched for opening up of the financial services sector in India, particularly banking and insurance, to allow British banks with a long presence in India to expand and become more competitive.

"UK has suggested an India-EU FTA... We are open to all ideas that enhance our trade engagement," Nath told reporters after the meeting.

Nath flagged, in particular, India's interests in addressing the issue of tariff peaks and tariff escalation in developed countries' markets under the ongoing non-agricultural market access (NAMA) negotiations at the WTO, as these adversely affected exports of value-added products from India.

The UK side raised the issue of market access for alcoholic beverages to India. The Indian side urged that Indian whisky be classified as whisky for market access purpose. Indian whisky is not allowed to be marketed in Europe as whisky since it is molasses-based, with the EU contending that it must be manufactured from grain-based alcohol.

The UK is India's largest trading partner in the EU, with Indo-UK two-way trade estimated at US $7 billion during 2004-05.

It was indicated during the discussions that the second meeting of the India-UK Joint Economic and Trade Commission would take place in London later this month, which would discuss in detail substantive measures for increasing the scope of bilateral trade and investment between the two countries.