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20 Feb, 2024 13:53

UK seeking ‘more favorable’ terms to sign trade pact with India

Each country has prioritized the free-trade-agreement talks ahead of impending polls, but the deal has run into stumbling blocks
UK seeking ‘more favorable’ terms to sign trade pact with India

New Delhi should reduce tariffs on goods and open up its markets for a more favorable Free Trade Agreement (FTA) with London, the Hindu BusinessLine newspaper reported on Monday, quoting unnamed UK government officials.

Negotiations between the two sides, which began in January of 2021, seem to have hit a roadblock, with Indian companies refusing to offer import-duty concessions without London offering easier temporary movement of Indian professionals to the UK for business purposes. The 14th and concluding round of negotiations between the countries started in January.

The proposed India-UK FTA can be sealed in as little as three weeks “provided India opens up more,” the outlet quoted an unnamed official as saying. “There are economic and political ambitions on both sides.”

Indian goods exported to the UK attract none-to-very-low tariffs. At 14.6%, the average payment on UK exports to India, on the other hand, is much higher. Through the trade agreement, Britain is seeking a reduction for high-tariff goods such as automobiles (100%) and whiskey (150%), the report noted. London is also seeking liberalization of financial and legal services and strict Intellectual Property Rights (IPR) rules to give additional protection to pharmaceutical majors.

India’s main demand has been more mobility for Indians travelling to the UK, lowering tariffs for items such as textiles where duties are high, and a social security totalization agreement, according to officials. The UK, however, does not appear comfortable with offering big concessions to Indian workers.

An FTA with the UK gains special prominence for India, as its negotiations with Canada have halted amid the ongoing diplomatic imbroglio between the two sides. The UK, too, considers a trade deal with India as vital, post-Brexit.

Earlier this month, Indian Commerce Secretary Sunil Barthwal suggested that the deal is taking time as New Delhi wishes to safeguard its interests. “India should commercially gain out of it and we should also be able to safeguard the interest of our farmers, PLI (production linked incentive) scheme goods,” he told the press earlier this month.

The comment came against the backdrop of a nationwide protest by farmers whose demands include increased taxes on imported produce, cancellation of free-trade and other agreements with the World Trade Organization, and ban on foreign direct investment in the agriculture sector.

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