India-UK FTA talks: Both sides seek to bridge gaps to close deal swiftly

Starmer and PM Modi met on the sidelines of the summit in Rio de Janeiro on Monday

India and the UK would seek to bridge the differences for expeditious conclusion of the proposed free trade agreement as Britain has announced resuming the negotiations early next year, an official statement said on Wednesday.

British Prime Minister Keir Starmer has announced that trade talks with India will relaunch in the new year, following his bilateral meeting with Prime Minister Narendra Modi at the G20 Summit in Brazil.

Starmer and Modi met on the sidelines of the summit in Rio de Janeiro on Monday, after which Downing Street said the UK will seek a new strategic partnership with India, including a trade agreement.

 

The India-UK talks for the proposed FTA began in January 2022. The 14th round of talks stalled as the two nations stepped into their general election cycles.

"We welcome the announcement by the UK to relaunch the India-UK free trade talks in the new year," the commerce ministry said.

Noting the importance for securing a balanced, mutually beneficial and forward looking FTA, it said, India looks forward to closely working with the UK's negotiating team to address remaining issues to mutual satisfaction.

The dates would be finalised through diplomatic channels soon.

"The FTA talks would resume the discussions from the progress achieved previously and seek to bridge the gaps for expeditiously closing the trade deal," it added.

There are pending issues in both the goods and services sectors.

The Indian industry is demanding greater access for its skilled professionals from sectors like IT and healthcare in the UK market, besides market access for several goods at nil customs duty.

On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, electric vehicles, lamb meat, chocolates and certain confectionary items.

Britain is also looking for more opportunities for UK services in Indian markets in segments like telecommunications, legal and financial services (banking and insurance).

The two countries are also negotiating a bilateral investment treaty (BIT).

There are 26 chapters in the agreement, which includes goods, services, investments and intellectual property rights.

The bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from 20.36 billion in 2022-23.

A virtual meeting between Commerce and Industry Minister Piyush Goyal and Jonathan Reynolds, UK Secretary of State for Business and Trade, was held on July 11 to discuss next steps on the pact.

During April-September this year, India's exports to the UK witnessed a growth of 12.38 per cent, reaching USD 7.32 billion, compared to USD 6.51 billion during the same period in 2023.

Mineral fuels, machinery, and precious stones, pharmaceuticals, apparels, iron and steel and chemicals lead India's export basket to the UK, contributing a 68.72 per cent share of total exports.

"The UK is a priority country for the achievement of our ambitious USD 1 trillion export target by FY30, with our exports to the UK expected to reach USD 30 billion by 2029-30," the ministry said.