India and the United Kingdom plan to launch negotiations on a trade deal between the two nations by 1 November 2021, the commerce and industry said on Tuesday.
Both nations are looking at an interim trade deal by March next year, which will be followed by a comprehensive FTA.
The interim deal will involve early concessions on certain key high-priority products and services related to tariffs or market access
Commerce and industry minister Piyush Goyal said that an interim trade agreement is the first step towards an FTA that would allow both nations to immensely benefit from the early gains of the partnership.
“The International Trade Secretary reaffirmed her ambition to negotiate a trade agreement that delivers results for the British people and businesses including those in digital and data, tech and food and drink,” the U.K. statement highlighted, indicating its priority areas.
Similarly, both the sides may also explore the signing of few mutual recognition agreements in select services segments, including nursing and architecture, Goyal said.
Before the pandemic, India shipped out goods worth $8.7 billion to the UK in FY20 and its imports from that nation stood at $6.7 billion. However, bilateral trade dropped to $13.2 billion last fiscal in the wake of the pandemic. India mainly exports textiles & garments, gems and jewellery and certain capital and consumer goods to Britain and imports capital and consumer goods in large volumes as well.
In a meeting between commerce and industry minister Piyush Goyal and the UK’s secretary of state Elizabeth Truss late Monday, both the leaders reaffirmed commitment to further bolstering trade pact.
The negotiations with the UK are a part of India’s broader strategy to forge “fair and balanced” trade agreements with key economies and revamp existing pacts to boost trade. The move gained traction after India pulled out of the China-dominated RCEP talks in November 2019. Balanced FTAs will also enable the country to achieve sustained growth rates in exports in the coming years. Already, India has set an ambitious merchandise export target of $400 billion for FY22, against $291 billion in FY21.
Goyal said there is “keenness to have an early conclusion of negotiations for quick and early economic benefits to businesses on both sides (India and the UK)”. Substantial work has already been done and extensive stakeholder consultations have been held involving various stakeholders, both public and private.
The meetings of working groups, set up by both the countries for this purpose, are expected to be over by end-September, he added. The bilateral trade talks moved at a faster pace after Prime Minister Narendra Modi declared on May 4 the launch of enhanced trade partnership between India and the UK.
