January 5, 2022
The interim agreement is expected to include an early tariff on key high priority products and services
The UK is keen on reducing tariffs and a bilateral data adequacy agreement before the finalisation of the FTA
India and UK may consider organising a virtual launch due to rising COVID-19 cases
Both countries have agreed on an enhanced trade partnership to double bilateral trade to INR 5 lakh crore by 2030
India and the UK are expected to start formal negotiations for a free trade agreement (FTA) in the second week of January followed by the first round of talks after a week. Both countries aim to put an interim trade agreement in place by March 2022 followed by a comprehensive agreement. The interim agreement is expected to include early tariff or market access concessions on key high-priority products and services. In addition, the UK plans on relaxing immigration rules by offering cheaper visas for Indian tourists, students, and professionals. In FY21, India’s exports to the UK amounted to INR 60,700 crore and imports were INR 36,850 crore, with both countries agreeing on an enhanced trade partnership to double bilateral trade to INR 5 lakh crore by 2030.
Whisky, cars, vaccines, basmati rice, wool, yarn, instant coffee, and tea pre-mix are on the top of the Indian industry’s list of products that have been identified for duty cuts. The UK is keen on reducing tariffs on Scotch whisky and a bilateral data adequacy agreement before the finalisation of a full-fledged free trade agreement. In addition, a decrease or complete elimination of tariffs on automotive products, and exclusion of barriers to trade in food and drink, services, and healthcare and medical device sectors are among the objectives of the proposed agreement.
Although it is expected that a delegation comprising representatives of the UK’s trade ministry and businesses will visit India to launch the negotiations, the two sides may consider organising a virtual launch due to rising COVID-19 cases. The India-UK Joint Economic and Trade Committee (JETCO) is also expected to be present during the launch of the negotiations.