India, UK decide to push for sealing ambitious FTA by this year

Johnson said the UK is creating India specific open general export licensing to reduce delivery times for defence procurement

India and the United Kingdom on Friday set Diwali this year as the deadline for concluding negotiations on the bilateral Free Trade Agreement.

“Good progress is being made in the negotiations. And we have decided to make full efforts towards the conclusion of the FTA by the end of this year,” Prime Minister Narendra Modi said after he and his British counterpart Boris Johnson had a meeting in New Delhi. “We are telling our negotiators: get it (FTA) done by Diwali in October. Get it done by Diwali,” said Johnson.

The FTA will pave the way for the doubling of India-UK bilateral trade by 2030.

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India and the UK formally launched negotiations for an FTA on January 13 last, with the target for clinching an interim or early-harvest deal by the end of the year – covering at least 65% of goods and 40% of services. The final agreement is expected to cover 90% of tariff lines for goods.

“In the last few months, India has concluded Free Trade Agreements with UAE and Australia. At the same pace, with the same commitment, we would like to move forward on the FTA with the UK as well,” Modi said on Friday. “This (the FTA) could double our trade and investment by the end of the decade, driving down prices for consumers and increasing wages across the UK by as much as £3 billion,” said Johnson.

The India-UK FTA is likely to have 26 chapters and, according to the sources, the negotiators so far finalized four of them and made good progress in many of the remaining 22 chapters.

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Modi-Johnson meeting saw the two governments signing two MoUs – one on implementation of the Global Innovation Partnership and another for cooperation on the Global Centre for Nuclear Energy Partnership (GCNEP) were exchanged during the visit. Through the Global Innovation Partnership, India and UK have agreed to co-finance up to £ 75 million to support the transfer and scale-up of climate-smart sustainable innovations to third countries. The novel GIP Fund created under the partnership will also aim to raise an additional £ 100 million from the market to support Indian innovations.

The two sides announced the launch of Strategic Tech Dialogue – a ministerial dialogue on new and emerging communication technologies such as 5G, Artificial Intelligence – and collaboration between two navies for the co-development of integrated electric propulsion technology.

The two prime ministers acknowledged that current global energy price volatility underscored the importance of domestic and international energy security and the clean energy transition. They welcomed progress on offshore wind energy and on electric mobility since the signing of the Zero-Emission Vehicles Declaration. They agreed to strengthen collaboration, including through the Joint Declaration of Intent between India’s National Institute of Wind Energy and the UK’s Offshore Renewable Energy Catapult.

Modi and Johnson also noted a $ 200 million guarantee by GuarantCo for Axis Bank, to accelerate India’s transition to Electric Vehicles. They appreciated the ongoing cooperation on the development and deployment of affordable green hydrogen for both countries, including through the India-UK Science and Innovation Partnership on Green Hydrogen and joint work on a Green Hydrogen Hub.

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