NEW DELHI, July 12: With the new Government taking charge in Britain, the proposed free trade agreement (FTA) between India and the UK will get a renewed push and a comprehensive pact would deliver a win-win result for both economies, experts said.
They said that promoting export of services seem to be a priority for the UK’s Labour Government and it will seek to negotiate standalone sector deals, such as digital, or mutual recognition agreements, to promote services exports.
International trade expert and Hi-Tech Gears Chairman Deep Kapuria said the new UK Government will seek a new strategic partnership with India, including an FTA, as well as deepening co-operation in areas like security, education, technology, and climate change.
“This is a positive indication for India but its goal to reduce net migration may cause some hindrance in FTA signing,” he said.
Kapuria said while it is too early to draw any definitive conclusion on the future of India-UK FTA negotiation, it all depends upon how soon the new Labour government spells out its priorities and more importantly on the promised action to reduce net immigration.
“For India, undoubtedly, the UK is an important market for both goods and services export as well as an important source of FDI. A comprehensive FTA with the UK will deliver win-win results for both the economies,” he added.
Ludhiana-based exporter SC Ralhan said the UK is a key export destination for Indian businesses and a free mutually beneficial trade agreement will help increase India’s outbound shipments to Britain.
Ralhan added that the negotiations for the agreement will now get a renewed push as the new government has taken charge in the UK.
Commerce and Industry Minister Piyush Goyal recently stated that both India and the UK are committed to the proposed FTA between the two countries.
Britain’s newly elected Prime Minister Keir Starmer has said he stood ready to conclude an FTA that worked for both sides.
The India-UK talks for the proposed FTA began in January 2022. The 14th round of talks stalled as the two nations stepped into their general election cycles.
In an FTA, two or more trading partners either significantly reduce or eliminate customs duties on the maximum number of goods traded between them. Besides, they also ease norms to promote and facilitate trade in services and investments.
There are pending issues in both the goods and services sectors.
The bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from 20.36 billion in 2022-23. (PTI)
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