UK-India free trade agreement set to conclude swiftly: Piyush Goyal

Trade pact accelerates under new UK government led by Keir Starmer

July 11, 2024

Commerce Minister Piyush Goyal confirms that the Free Trade Agreement between the UK and India is set to close very quickly

Prime Minister Narendra Modi and UK Prime Minister Keir Starmer reaffirmed their commitment to finalising a mutually beneficial deal

Issues such as lower import duties on Scotch whisky, electric vehicles, investment protection, social security agreements, and market access for British apples and cheese remain unresolved

Senior officials from both nations are set to hold the next round of talks this month to address pending issues and expedite the agreement

Soon after Labour Party’s Keir Starmer took charge of the government in Britain, Commerce Minister Piyush Goyal confirmed that the much-awaited Free Trade Agreement (FTA) between the UK and India is set to close very quickly, reported The Financial Times. Goyal highlighted that past discussions showed both sides are largely in agreement on most issues, indicating that a deal may be finalised soon.

Goyal also urged the UK to avoid the mistake made by former Prime Minister Boris Johnson, who had promised in early 2022 that a trade agreement could be finalised within six months, a deadline that was not met. This development follows a telephonic discussion between Prime Minister Narendra Modi and newly-appointed UK counterpart Keir Starmer, where both leaders expressed their readiness to conclude a deal that works for both sides.

The UK’s push for lower import duties on goods like Scotch whisky and electric vehicles is a significant point of contention in the deal. Lower import duties could potentially boost the UK’s exports to India, particularly in the luxury goods and automotive sectors. Additionally, issues over investment protection, social security agreements, and market access for British apples and cheese must be resolved. The Labour Party has criticised the Conservatives for over-promising and under-delivering on the UK-India FTA, declaring they are “ready to go” to finalise the deal.

Shadow Foreign Secretary David Lammy emphasised that the FTA should be a foundation for the partnership and aims to complete it by the end of 2024. The FTA is expected to bring significant economic benefits to both India and the UK, including increased trade volumes, job creation, and enhanced economic cooperation. India and the UK have completed 13 rounds of FTA negotiations to enhance their estimated £38.1 billion annual trading relationship. Total bilateral trade between India and the UK increased to $20.36 billion in 2022-23 from $17.5 billion in 2021-22.

So far, only Australia and New Zealand have agreed on new FTAs, which has caused discontent among British farmers. Talks with Canada were paused earlier this year due to disagreements on food safety standards. To resolve pending issues and close the negotiations, senior officials from India and the UK are set to hold the next round of talks this month. The India-UK talks for the proposed FTA began in January 2022 but stalled as both nations entered their general election cycles.

Source: Economic Times

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