India and the United Kingdom are edging closer to securing a UK-India Free Trade Agreement (FTA) this year, with final negotiations regarding contentious issues, such as investment treaties and intellectual property rights (IPRs), reportedly on the verge of conclusion.
According to recent media coverage, the two nations have made significant progress in resolving disputes related to investment agreements, IPRs, and rules of origin. Sunil Barthwal, India’s Commerce Secretary, affirmed that the agreement could be signed “much before” the end of this year, as negotiations on almost all controversial matters are completed.
“Out of the 26 chapters in the FTA, 19 have already been closed,” Barthwal stated. The remaining topics to be discussed involve IPRs, rules of origin, and the investment treaty. In discussions around rules of origin, the countries are exploring issues related to product-specific rules, value addition, chapter heading changes, and certification.
A successful FTA with the UK would mark India’s first such agreement with a developed country, following the interim trade pact signed with Australia last year. Conversely, for Britain, the FTA represents a step forward in its post-Brexit strategy to diversify global trade relations, which commenced after the UK’s exit from the European Union in 2020.
A spokesperson for the UK’s Department for Business and Trade emphasised the commitment to ensuring the best deal for the British people and the economy, stating, “We are clear that we will only sign when we have a deal that is fair, balanced, and ultimately in the best interests of the British people and the economy.”
Bilateral trade between India and the UK soared by 16.6% year-on-year to reach $20.42 billion in the 2022-23 fiscal year, which ended in March. India’s primary exports to the UK encompass an array of sectors, including garments, textiles, gems, jewellery, engineering, petroleum products, transport equipment, and pharmaceuticals, among others.
The UK stands as the most significant market for Indian IT services in Europe and is a leading investor in India. In the 2022-23 fiscal year, foreign direct investment from the UK into India increased from $1 billion to $1.74 billion. Over the period from April 2000 to March 2023, investments accumulated to $33.9 billion.
The UK, boasting a $3.1 trillion economy per World Bank data, has a notable global influence in the service sector. London, one of the world’s primary financial hubs, continues to attract Indian companies seeking to raise capital in global markets.
The 11th round of talks on the agreement, which reflects an increasingly interconnected global economy between countries, was recently held in London during the visit of Barthwal and India’s Commerce and Industry Minister Piyush Goyal. It is estimated that this agreement, if achieved, will mark an important milestone in the development of trade relations between developed and developing countries.
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