UK-India Business Council Optimistic as FTA Talks Resume, Aiming for Stronger Bilateral Trade Ties
The UK-India Business Council welcomes the resumption of Free Trade Agreement (FTA) negotiations, aiming to strengthen bilateral trade and investment. With UK-India trade reaching £42 billion, both nations are committed to finalizing a mutually beneficial deal.
New Delhi: The UK-India Business Council (UKIBC) has expressed optimism as negotiations for the Free Trade Agreement (FTA) between the two nations officially resumed.
The discussions were reignited during the visit of UK Business and Trade Secretary Jonathan Reynolds to India, where he engaged in two days of high-level meetings with India’s Commerce and Industry Minister Piyush Goyal and his team.
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After a temporary pause due to the UK’s general elections in May 2024, India and the UK resumed their 14th round of FTA negotiations on Monday, marking a significant step toward strengthening economic ties.
Growth in UK-India Trade and Investment
The recommencement of talks comes against the backdrop of a steadily growing trade relationship between the two countries. According to a statement from UKIBC, total trade in goods and services between India and the UK witnessed a 10% increase, reaching £42 billion in the four quarters ending in Q2-2024. This figure represents nearly a two-fold increase from pre-pandemic levels in 2019 when trade stood at £24.1 billion.
The ongoing negotiations reflect the commitment of both nations to foster deeper trade and investment. With substantial progress already made in previous rounds since the launch of negotiations in 2022, the UK and India are focused on finalizing a mutually beneficial deal that will enhance market access and reduce trade barriers.
Commitment to Strengthening Bilateral Relations
The UK-India Business Council praised both governments for their dedication to enhancing economic cooperation. UKIBC Chair Richard Heald highlighted the importance of Reynolds’ visit in reaffirming the UK government’s ambition to build a future-focused trade and investment relationship with India.
Heald also pointed out the broader scope of UK-India collaboration, particularly in technology, security, climate change, research, and innovation. Last year’s announcement of the Technology Security Initiative further strengthened these ties, paving the way for enhanced cooperation in emerging sectors like artificial intelligence (AI) and digital security.
Potential Economic Impact of a Successful FTA
A comprehensive FTA between India and the UK has the potential to unlock new trade and investment opportunities, benefitting businesses in both countries. Analysts believe that reducing tariffs and regulatory bottlenecks will significantly boost trade in key sectors such as:
- Pharmaceuticals and healthcare
- Financial services
- Textiles and fashion
- Agriculture and food processing
- Technology and digital services
Heald emphasized that a successful FTA would not only fuel economic growth for both the world’s 5th and 6th largest economies but also catalyze collaboration in other critical areas.
Strategic Partnership for a Future-Ready Economy
With India on its ambitious path toward Viksit Bharat@2047, a vision for a developed India by its 100th year of independence, UKIBC and British businesses see the FTA as a crucial step in strengthening long-term economic ties.
The FTA negotiations are expected to cover key aspects such as:
- Tariff reductions on goods and services
- Market access for businesses and investors
- Investment protection mechanisms
- Ease of movement for skilled professionals
- Sustainable trade practices
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