While many aspects of the agreement have been resolved, some key issues remain. The Indian delegation last visited the UK in April to address some of these issues. (Photo: Shutterstock)
The UK-India free trade agreement (FTA) seems to be on hold for now. The newly elected United Kingdom (UK) government is yet to form a team to negotiate the 14th round of FTA talks with India. However, this process is likely to be finalised soon, according to a report by Moneycontrol.
The UK-India FTA, which aimed to give Britain access to Indian markets and open up the British market to Indian companies, was launched in January 2024. There were hopes of completing the deal before both countries faced general elections. So far, 13 rounds of talks have been completed in 2023, but the 14th round was halted, largely due to election schedules.
The FTA negotiations have not yet resumed because the UK has not yet appointed its negotiating team, the report added. Negotiations were originally due to continue in July, following elections in both countries, but delays have persisted.
In the UK, the Labour Party won, ending 14 years of Conservative rule. During his first visit to India in July, UK Foreign Secretary David Lammy stressed the importance of securing the FTA with India.
The trade deal appeared in the manifestos of both main UK political parties.
While many aspects of the agreement have been resolved, some key issues remain to be resolved. The Indian delegation last visited the UK in April to address some of these issues.
A major point of contention has been localisation rules for profit-seeking British carmakers. Another issue still under discussion is the import of whisky from the UK.
Trade between India and the UK has declined over the years
The UK’s share of trade with India has declined over the past decade. In the financial year 2023-24 (FY24), the two countries exchanged goods worth $21.3 billion, accounting for 1.9% of India’s total trade, down from 2.1% in FY2014.
While India’s total trade grew at an annualized rate of 3.8 percent between FY14 and FY24, trade with the UK lagged behind, growing at just 3 percent annually.
In addition to the FTA, the two countries are collaborating on research. During his visit to India, Lammy announced the Technology and Security Initiative, which aims to promote cooperation in critical minerals, advanced materials, healthcare technology, artificial intelligence and semiconductors.
This initiative is part of the UK-India 2030 Roadmap, signed by both nations in 2021.
First published: September 5, 2024 | 17:44 IS
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