To safeguard its domestic interests, India has decided to exclude data-related matters and concessions in the dairy sector from the proposed agreement. However, in an interesting twist, the negotiations have taken a new direction, with India contemplating offering duty concessions on automobiles and certain confectionery items.
This move aims to strike a balance between safeguarding domestic industries and promoting trade ties. The proposed free trade agreement between India and the UK is inching closer to realization.

India’s main exports to the UK include ready-made garments and textiles, gems and jewelry, engineering goods, petroleum and petrochemical products, transport equipment, spices, machinery and instruments, pharmaceuticals, and marine products.
Furthermore, a significant boost in the negotiations was witnessed following the recent visit of Commerce and Industry Minister Piyush Goyal and Commerce Secretary Sunil Barthwal to London, where they held crucial meetings with various stakeholders, including senior British officials.

India got USD 1.74 billion in foreign direct investment from the UK in 2022–23, up from USD 1 billion in 2021–22. Investing totaled USD 33.9 billion between April 2000 and March 2023.

Under such agreements, two trading partners drastically decrease or remove customs tariffs on the maximum number of items exchanged between them, in addition to relaxing rules to encourage trade in services and investments.

Navigating data localization and “Rules of Origin”

UK corporations have expressed worries about India’s data localization regulations. Another official stated that India and the United Kingdom are extremely close to completing discussions for a potential free trade agreement, with both parties trying to iron out disagreements on subjects such as investment treaties, intellectual property rights (IPRs), and rules of origin.

Nineteen of the FTA’s 26 chapters have been closed. Both nations discuss product-specific requirements, value addition, and certification in their rules of origin chapters. The ‘rules of origin’ section specifies the minimal processing that must take place in an FTA nation in order for the final finished product to be called as originating products in that country.

Moreover, under this clause, a nation that has signed an FTA with India is not permitted to dump goods from a third country into the Indian market simply by labeling them.

To export to India, it must perform a mandated value addition on that commodity. Rules of origin serve to keep items from being dumped. Investment is being discussed separately (as a bilateral investment treaty) between India and the United Kingdom, and it may be finished concurrently with the free trade agreement.

Bilateral commerce between the nations climbed to USD 20.36 billion in 2022–23, up from USD 17.5 billion in 2021–22. India’s principal exports to the United Kingdom include ready-made clothes and textiles, gems and jewelry, engineering goods, petroleum and petrochemical products, transportation equipment, spices, machinery and instruments, medicines, and marine items.