A UK Foreign Office minister Tariq Ahmad told news agencies that negotiations between India and the UK regarding the Free Trade Agreement (FTA) deal will commence very soon.
The UK Foreign Office Minister for South Asia, Tariq Ahmad, said the relationship between India is central to the UK’s foreign policy and it is a key partner to one of the world’s largest economies.
The comments by Tariq came during a debate held in the UK Parliament titled ‘The Importance of the Relationship Between the United Kingdom and India.’ The debate was tabled by British Indian peer Baroness Sandy Verma, news agency PTI said in a report.
“As one of the world’s biggest and fastest-growing economies, India is a key partner to the UK. We are also looking at lowering non-tariff barriers on medical devices to benefit British exporters, and are well advanced in our negotiations for an ambitious and balanced free trade agreement. Cutting red tape and high tariffs could also make it easier and cheaper for UK companies to sell in India, driving growth and supporting jobs,” Tariq was quoted as saying by news agency PTI.
Tariq reiterated Conservative Party chief and UK Prime Minister Rishi Sunak’s concerns regarding a trade deal signed ‘hurriedly’. Sunak said earlier in 2022 that the UK wants a trade deal with India but speed should not compromise quality.
Six rounds of negotiations have been held regarding the trade deal between India and the UK and the deadline of completing it by Diwali 2022 – set by former UK PM Boris Johnson – was not met.
Discussions on draft treaties across 11 policy areas were held during 28 separate sessions, PTI said.
The politicians also urged Rishi Sunak to lead a delegation to India – as early as possible. “Today India has the presidency of the G20. Today India has a vision to become, in the next 25 years, the second-largest economy in the world with a GDP of USD 32 billion,” Lord Karan Bilimoria was quoted as saying.
He further added: “The Indian express has left the station. It is now the fastest train in the world—the fastest-growing major economy in the world. The UK must be its closest and most trusted friend and partner.”
Who Gains What from the FTA Deal?
A free trade agreement means both countries who are part of the deal will reduce or even eliminate customs duties on a large number of goods that are traded between them. Norms are relaxed to allow promotion of trade and investment between countries as part of the deal.
Separate reports by the Economic Times and Times of India said that India wants to bring rules that can address the issue of ‘evergreening’ – a pharma company practice which allows them to extend the lifetime of their patents that are about to expire and also wants work visas to be issued in a streamlined manner, among other things.
India also wants to negotiate the binding commitments on new issues like environment, labour and sustainability in the proposed FTA, the Economic Times said in its report.
According to a report by the Times of India, the UK is largest among European countries when it comes to being the source of remittances. It also ranks sixth-largest when it comes to Foreign Direct Investment (FDI). The report said that the cumulative equity investment between both nations during April 2000 and September 2020 reached $29.6 billion. This accounts for 6% of total FDI into India, the Times of India said.
For Indian exporters, the UK is the seventh-largest export destination. According to official UK government data, India-UK bilateral trade currently stands at around 29.6 billion pounds a year.
The trade deal was stalled after the UK home secretary criticised Indians for overstaying their visas, leading to minor diplomatic tussles.
The UK wants India to cut tariffs so they can bring UK-made products into the Indian market. They also want India to open opportunities for UK services such as financial and legal, so that trade can be promoted between both sets of traders from each nation.
The report by Economic Times said that the UK seeks a reduction in import duty on scotch and automobiles but also focuses on bringing labour within the ambit of the FTA. The report also said that issues related to environment, labour, intellectual property rights, data governance, digital trade, gender, SMEs, anti-corruption, good regulatory practices, and sustainable food systems which directly are not part of the FTA are also being discussed by India at the request of developed countries.
It should also be noted that defence and cyber security related issues will also be part of the FTA.
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