India, UK making last ditch effort to conclude FTA talks; Goyal may visit London again this week

New Delhi: Commerce and Industry Minister Piyush Goyal is likely to visit London again this week as India and the UK are making a last-ditch effort to iron out differences and announce the conclusion of talks for the proposed free trade agreement (FTA), sources said.

There are four or five outstanding issues in all three pacts that the two countries are negotiating, they added. The three pacts under negotiation are - free trade agreement, bilateral investment agreement (BIT), and social security pact (officially dubbed as Double Contribution Convention Agreement).

The two sides were preparing to announce the closure of these negotiations on April 29 in London but differences cropped up over certain technical issues at the last minute.

Goyal concluded his two-day visit to London on April 29. On Monday he held bilateral meetings with UK Secretary of State for Business and Trade Jonathan Reynolds MP. The two held discussions to push forward negotiations on these pacts. The minister at present is in Oslo (Norway) and is scheduled to visit Brussels on Thursday. After that, he may visit London again on Friday or Saturday, according to the sources.

One of the sources said that there are outstanding technical issues in areas including BIT, and financial services.

"Talks are progressing at a faster pace. Talks are going on. We are very optimistic. A lot of issues were closed during the visit of Finance Minister Nirmala Sitharaman and the commerce minister," they said, adding issues pertaining to matters including visas, wines, spirits, and electric vehicles have been resolved and closed.

Sitharaman on April 9 wrapped up the 13th Ministerial India-UK Economic and Financial Dialogue (EFD) with her British counterpart Chancellor Rachel Reeves on a positive note and expressed eagerness to conclude the agreement negotiations soon.

Before that on February 24, Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds had announced the resumption of negotiations for the proposed FTA between the countries. The talks resumed after a gap of over eight months. So far, 14 rounds of talks have been completed which were launched on January 13, 2022.

In FTAs, two countries either eliminate or significantly reduce customs duties on maximum goods traded between them. They also ease norms for promoting trade in services and bilateral investments.

The Indian industry is demanding greater access for its skilled professionals from sectors like IT and healthcare in the UK market, besides market access for several goods at nil customs duty.

On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, electric vehicles, lamb meat, chocolates and certain confectionary items.

Britain is also looking for more opportunities for UK services in Indian markets in segments like telecommunications, legal and financial services, including banking and insurance.

There are 26 chapters in the agreement, which includes goods, services, investments and intellectual property rights.

The bilateral trade between India and the UK increased to $21.34 billion in 2023-24 from $20.36 billion in 2022-23. The average duty on goods imported from India into the UK is 4.2 per cent.

According to economic think tank GTRI, items including textiles, apparel (shirts, trousers, women's dresses, bed linen), footwear, carpets, cars, marine products, grapes, and mangoes would benefit from the pact, as these products face relatively low to moderate tariffs in the UK.