Pankaj Singh Bisht, Jadetimes Staff
Pankaj is a Jadetimes news reporter covering Business News.
The United Kingdom and India have formally resumed talks on a full-scale free trade agreement (FTA), with the two countries seeking to deepen economic ties. UK Business and Trade Secretary Jonathan Reynolds and Indian Commerce Minister Piyush Goyal are leading the negotiations in New Delhi, which is the 15th round of talks since they were interrupted by general elections in both nations last year.
Key Objectives of the Negotiations
The key areas of the FTA talks are:
Tariff Cuts: The UK is pushing for deep tariff cuts on exports like cars, whisky, and foodstuffs, which are presently subject to heavy import tariffs in India.
Access to Services Sector: Opening up more opportunities for British service companies in areas such as accountancy, architecture, and technology in the fast-growing Indian market.
Visa and Mobility Arrangements: India wants more efficient visa procedures and social security arrangements to make it easier for its professionals and students to travel to the UK.
Carbon Tax Exemptions: India is seeking exemptions from the UK's upcoming carbon border adjustment mechanism, seeking to shield its exports from further charges.
Economic Importance
The UK-India bilateral trade relationship is now worth around £41 billion.
India's economy is on a strong growth path, set to become the third-largest in the world by 2028.
This economic rise offers huge potential for both countries to increase trade and investment relations.
Challenges and Considerations
Despite common interests, a number of challenges remain:
Regulatory Barriers: India's strict trade practices and high tariffs have in the past presented foreign companies with entry difficulties.
Labor Mobility: Domestic policies of the UK regarding work visas and immigration can affect the degree to which it can be responsive to India's demands for increased mobility of professionals and students.
Environmental Policies: The need to balance environmental obligations with trade interests, especially in relation to carbon taxes, necessitates diplomatic negotiation to meet both sides' priorities.
Strategic Implications
For the UK, obtaining an FTA with India is consistent with its post-Brexit approach to strengthening its trade relationships outside the EU. For India, a pact could support its export markets as well as secure investments, driving further economic growth.
The renewed negotiations for the FTA between the UK and India represent a crucial move to increase bilateral economic cooperation. As challenging as they are, however, the merits of a large-scale trade pact hold great hopes for both countries in the unfolding global economic world.
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