PremiumAfter missing the Diwali deadline, due to unprecedented economic and political crises in the United Kingdom (UK), the officials from Britain are likely to visit India in December to conclude the Free Trade Agreement (FTA) talks in the next four months. The trade agreement aims to double the bilateral trade between both nations by 2030.
An official from the Indian government informed the news agency Reuters that both countries will soon finalize if the next month's meeting will be ministerial level or secretary level.
"It will take 3-4 months of steady negotiations to complete this agreement, with broad understanding over issues such as mobility and short-term work visas to the UK," the official told news agency Reuters.
The official also informed that 14 chapters out of the 26 chapters are already finalized and the delegation from the UK will cover finer aspects of the trade deal and is expected to conclude the FTA by March 2023.
The two sides had earlier decided on Diwali as the deadline for the FTA, but as the political/economic crises in the UK unfolded with the resignations of two Prime Ministers and record inflation, the FTA between India and UK went on the backseat.
Now, as the new Prime Minister of the UK Rishi Sunak settles in and India also reviewing certain aspects of the deal, the FTA deliberations are expected to stretch for some more months.
“The UK has recently announced a cabinet, and it may want to do fresh consultation with the industry. Now that we have a new commerce secretary, the industry would want the new secretary to relook at certain terms of the deal, especially the auto and the liquor industry, which have expressed concerns over opening up the sectors," said a commerce department official.
“In addition, there are Christmas holidays around the corner for the UK. Most importantly, we will have the Union budget in February, so it may take time. Signing a deal would happen after it has been cleared by the bureaucracy," added the official.
One area of contention is Scotch whisky, on which both sides seem reluctant to move. While India is vowing to reduce the 150% duty on Scotch whisky to 100% in the first year and further to 50% in 10 years, the UK is demanding a reduction to 75% with the enforcement of FTA and then to 30% within three years.
India and UK launched FTA negotiations in January this year and it is intended to cover 90% of the trade tariffs between both countries. The FTA aims to double the bilateral trade to about $100 billion by 2030. Currently, the trade between both countries is dominated by services which accounts for almost 70% of the total trade.