While many aspects of the deal have been settled, some key issues remain unresolved. The Indian delegation last visited the UK in April to address some of these matters. (Photo: Shutterstock)
The UK-India free trade agreement (FTA) appears to be on hold for now. The newly elected United Kingdom (UK) government is yet to form a team to negotiate the 14th round of FTA talks with India. However, this process is likely to be finalised shortly, according to a report by Moneycontrol.
The UK-India FTA, aimed at providing Britain with access to Indian markets while opening the British market to Indian businesses, was initiated in January 2024. There were hopes of completing the agreement before both countries faced general elections. So far, 13 rounds of talks have been completed by 2023, but the 14th round was halted, largely due to election schedules.
The FTA talks have yet to resume because the UK has not yet appointed its negotiating team, the report added. Negotiations were initially set to continue in July, following elections in both nations, but delays have persisted.
In the UK, the Labour Party won, ending 14 years of Conservative rule. During his first visit to India in July, UK Foreign Secretary David Lammy emphasised the importance of securing the FTA with India.
The trade agreement was featured in the manifestos of both major UK political parties.
While many aspects of the deal have been settled, some key issues remain unresolved. The Indian delegation last visited the UK in April to address some of these matters.
A major point of contention has been localisation rules for British car manufacturers seeking benefits. Another area still under discussion is the import of whiskey from the UK.
India-UK trade has declined over the years
The UK’s share of India’s trade has seen a decline over the last decade. In the financial year 2023-24 (FY24), the two countries traded goods worth $21.3 billion, representing 1.9 per cent of India’s overall trade, down from 2.1 per cent in FY14.
While India’s total trade grew at an annualised rate of 3.8 per cent between FY14 and FY24, trade with the UK lagged, growing at only 3 per cent annually.
In addition to the FTA, the two countries are collaborating on research. During his visit to India, Lammy announced the Technology and Security Initiative, which aims to promote cooperation on critical minerals, advanced materials, health tech, artificial intelligence, and semiconductors.
This initiative is a part of the UK-India 2030 roadmap, signed by both nations in 2021.
First Published: Sep 05 2024 | 5:44 PM IST