India plans to restart FTA negotiations with the UK in early 2025, aiming for significant export growth and closer trade relations amid geopolitical uncertainties. Both nations are optimistic about reaching a mutually beneficial agreement despite existing challenges.
On January 1, 2025, India will recommence negotiations for a free trade agreement (FTA) with the United Kingdom, which has been designated as a “priority country.” Following discussions between Prime Minister Narendra Modi and UK Prime Minister Keir Starmer during the G-20 Summit in Rio de Janeiro, the Indian government announced this development. The resumption of FTA talks aims to significantly enhance Indian exports to the UK and facilitate India’s target of $1 trillion in merchandise exports by FY30. The UK views this FTA as a means to secure essential food supplies and stabilize product availability in light of geopolitical uncertainties that affect inflation rates. Recent trade statistics indicate a robust trade relationship, with UK exports to India surging 30.5% in the first half of 2024-25, reaching $4.22 billion. Similarly, India’s exports to the UK grew by 12.38%, totaling $7.32 billion during the same period. Initially initiated in January 2022, the FTA discussions encountered delays due to political changes in the UK. Although the process resumed under Prime Minister Rishi Sunak, unresolved issues regarding automobile import duties, scotch whisky tariffs, and business visa facilitation persist. The advent of a new Labour government may also bring further complexities to the negotiation landscape. Nonetheless, both nations remain optimistic about finalizing a mutually beneficial agreement. The specific dates for the upcoming talks in early 2025 will be orchestrated through diplomatic efforts, and discussions will build upon the prior negotiations. The UK ranks among India’s top ten trading partners, reflecting a profound potential for deeper economic cooperation moving forward.
India and the United Kingdom have been engaged in discussions regarding a free trade agreement (FTA) since 2022, initially propelled by Prime Ministers Modi and Johnson. However, political changes in the UK have led to intermittent pauses in negotiations. Given the current geopolitical climate, both countries recognize the strategic importance of an FTA, which could enhance trade flows and ultimately contribute to economic stability amid global challenges.
In summary, the resumption of FTA negotiations between India and the UK signifies a crucial step towards fortified bilateral trade ties. The anticipated agreement aims to bolster Indian exports significantly and support the UK’s quest for straightforward trade relations amidst tumultuous geopolitical conditions. While challenges remain, both governments are committed to achieving a deal that reflects their shared interests and mutual benefits.
Original Source: www.hindustantimes.com
