According to a top trade ministry official cited by Reuters, India and Britain are likely to sign a free-trade agreement (FTA) this year. The two nations have reached a consensus on the broader structure of the deal.
“We want to finalise the deal at the earliest,” Sunil Barthwal, India’s commerce secretary, told reporters on Friday (July 28).
Barthwal said that negotiations on almost all contentious issues were completed. He added that the deal could be signed “much before” the year-end.
India views FTA with Britain as crucial step to becoming a bigger exporter. The UK meanwhile, would obtain wider access for its whiskey, premium cars and legal services.
If the deal gets signed, it will be India’s first with a devloped country after its interim trade pact with Australia last year.
Britain has embarked on a search for diversified global trade relationships after its 2020 exit from the European Union.
It comes at a crucial time for Indian Prime Minister Narendra Modi, who wants to solidify New Delhi’s business-friendly image ahead of national elections early next year.
The 11th round of talks over the deal concluded recently in London when Barthwal and Commerce & Industry Minister Piyush Goyal were in London.
Things not final yet
Barthwal said that out of total 26 chapters in the FTA, discussions on 19 have been closed. These include issues related to the sensitive automobile sector.
In spite of all this progress the countries are yet to settle differences over intellectual property rights (IPR), rules of origin and an investment treaty, separate trade ministry sources said.
On the issue of rules of investment has been reached but custom authorities of both countries are still working out modalities.
“Nothing is final till everything is final,” he said when asked about details of concessions India was offering to the UK, adding that the next round of negotiations will be held shortly.
India is pushing for a “zero tariff” for textile, leather and other labour-intensive manufacturing sectors while Britain had sought tariff concessions in other areas, said Barthwal.
Bilateral trade between India and the United Kingdom rose 16.6% year-on-year to $20.42 billion in the 2022/23 fiscal year ending in March.