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India and UK – Free Trade Agreement Negotiations

  • IAS NEXT, Lucknow
  • 17, Jan 2022
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India and UK Launch Free Trade Agreement Negotiations

  • Proposed FTA expected to help double bilateral trade by 2030
  • FTA to give major fillip to Indian exports in labor intensive sectors like Leather, Textile, Jewellery and processed Agri-products
  • Will give a big boost to employment generation
  • India is also expected to register a quantum jump in the export of Marine Products through the recognition of 56 marine units of India.
  • There is also great potential for increasing exports in service sectors like IT/ITES, Nursing, education, healthcare, including AYUSH and audio-visual services. 
  • India would also be seeking special arrangements for movement of its people
  • The Mutual Recognition Agreements (MRAs) on Pharma could provide additional market access.

FTA with UK will provide certainty, predictability and transparency, creating a more liberal, facilitative and competitive services regime. The India-UK FTA will also contribute in integrating value chains and help augment our mutual efforts to strengthen the resilience of supply chains.

India and UK

Both India and UK are vibrant democracies, with a partnership built on our shared history and rich culture. 

  • The diverse Indian diaspora in UK, who act as a “Living Bridge”, adds further dynamism to the relations between the two countries.
  • ‘Enhanced Trade Partnership’ (ETP) 
    • It sets an ambitious target of more than doubling bilateral trade by 2030. 
    • As part of the ETP, India and the UK agreed on a roadmap to negotiate a comprehensive and balanced FTA, including consideration of an Interim Trade Agreement for delivering early gains.
  • India-UK ‘Global Innovation Partnership’: It aims to support the transfer of inclusive Indian innovations to select developing countries, starting with Africa
  • A comprehensive partnership on migration and mobility: It will facilitate greater opportunities for the mobility of students and professionals between the two countries.

Irritants in India-UK relationship

  • Colonial History: If the anti-colonial resentment against Britain is always seething barely below the surface among the Indian political and bureaucratic classes, London hasfound it difficult to shed its own prejudices about India
  • Divergence on Pakistan: The bitter legacies of the Partition and Britain’s perceived tilt to Pakistan have long complicated the engagement between Delhi and London.
  • Growing anti-Indian sentiments: Delhi’s problems have been accentuated by the British Labour Party’s growing political negativity towards India & Indian migrants in UK. 

 Why India and Britain need each other?

  • Need for Economic Partnerships: Britain has walked out of EU and India has refused to join RCEP. Although both will continue to trade with their regional partners, they are eager to build new global economic partnerships.
  • Changing Geopolitics: The centre of international politics has shifted from Atlantic to Indo-Pacific. India is a natural ally for Britain in Indo-Pacific. India which is witnessing rise of China in Indo-Pacific, needs as wide a coalition as possible to restore a semblance of regional balance.
  • Climate Change: Both sides are committed to finding common ground on climate change.
  • Health Cooperation: The issues of immediate relief supplies of oxygen & other medical equipment, resilient medical supply chains have potential for bilateral strategic cooperation in the health sector and contributions to the global war on the virus.