India-UK FTA dialogue to enter final stage on Jan 10
The new round of negotiations is expected to be the most difficult because of technical issues and sensitivities, officials said, requesting anonymity.
New Delhi The 14th and the final round of negotiations for a free trade agreement (FTA) between India and the UK will enter the last lap from Wednesday and are likely to take up remaining issues such as business mobility, Scotch whiskey, automobiles, farm products, pharmaceuticals, rules of origin, and a separate pact to boost bilateral investments, three officials with direct knowledge of the matter said.
The new round of negotiations, scheduled to start on January 10, is expected to be the most difficult because of technical issues and sensitivities, they said, requesting anonymity. “We expect that this could be the final round and possibly political leaderships from both sides may intervene in case of a stalemate,” one official said.
“We already held a long 13th round and resolved almost all matters barring some of the contentious matters. The most difficult part comes always at the end in all such negotiations. However, an amicable resolution of all concerns raised by both parties are must for the success of any trade pact,” a second person said.
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The 13th round of negotiations for the trade pact took place from September 18 to December 15.
One of the key issues is business mobility, a third official said. “India wants easier movement of its professionals in the UK, which should not be mistaken by asking for a liberal immigration rules,” he said. India’s demand of liberalising business mobility for short-duration visits is only to facilitate trade between the two countries, particularly in services, and it is not related to the larger emigration issue, he added.
Indian industry was unwilling to offer import duty concessions to British manufacturers without London allowing easier mobility for Indian professionals, HT reported on October 3. If business mobility, or easier temporary movement of Indian professionals to the UK for business purposes, is taken out of the negotiations, there won’t be any significant gain for India as most Indian goods (more than 60% of total merchandise) already have duty-free access to the UK market, and most of the other items attract a low tariff of 5%, the report said.
The UK is seeking greater access to the Indian market for items such as dairy products, automobiles including electric vehicles, and Scotch whiskey. India has a high import duty on automobiles (100%) and whiskey (150%). Indian industry has expressed its willingness to substantially reduce tariffs in automobiles and whiskey, provided London reciprocates as per the Indian conditions.
“They must treat premium Indian whiskies at par with Scotch on a reciprocal basis, as some Indian brands are more popular than regular Scotch brands,” the third officialsaid. London is not willing to classify an Indian product as a whiskey unless matured for at least three years, headded. “In the Indian climatic condition, 12-18 months are enough. Beyond that the losses (due to evaporation) would make Indian products unviable,” he said.
The India-UK FTA negotiations was launched on January 13, 2022 and 24 out of total 26 chapters have been mutually agreed and the two partners converge on many points in the remaining chapters, he said. The talks are lingering, initially due to a change in the leadership in the UK, and later due to the differences between the two sides over violent protests by Khalistani elements in London and other British cities.
Compared to the ongoing talks with the UK, India expeditiously concluded two major FTAs in 2022. The first round of negotiations for a India-UAE Comprehensive Economic Partnership Agreement (CEPA) was held on September, 2021, the FTA was signed February 18, 2022 and it entered into force from May 1, 2022. Similarly, negotiations for India-Australia FTA started on September 30, 2021 and concluded on a fast-track basis by the end of March 2022. The India-Australia Economic Cooperation and Trade Agreement (ECTA) was signed on April 2, 2022. The pact was ratified by the parliaments of the two countries in November that year and the FTA was operationalised on December 29, 2022. Now the two countries are pursuing a wider deal, a Comprehensive Economic Cooperation Agreement (CECA).