India and the United Kingdom (UK) on Thursday formally launched negotiations for an ambitious free trade agreement (FTA) with an aim to first complete an interim agreement by mid-April and subsequently a comprehensive deal by the end of the year, which could double the bilateral trade to $100 billion by 2030.
Trade Minister Piyush Goyal and his British counterpart Anne-Marie Trevelyan, who is visiting India, jointly launched the talks for the FTA, which is touted as India’s deepest trade deal yet.
In a joint statement, both sides said the first round of negotiations will begin on January 17, and the next rounds will take place approximately every five weeks. “During negotiations, and on the path to a comprehensive agreement, both governments will consider the option of an interim agreement that generates early benefits for both the countries. The Indian negotiating team will be led by Nidhi Mani Tripathi, joint secretary at the department of commerce, and the UK negotiating team will be led by Harjinder Kang, director for India Negotiations at the department for international trade,” the statement said.
Trevelyan said both sides aim the FTA to be a future-facing deal, accelerating business in the cutting-edge sectors that are reshaping the global economy. “(This includes) areas like services, innovation where Britain and India are already world leaders and in which we are therefore ideal partners with many British and Indian businesses working side by side to push the boundaries of technology from fintech to greentech from automation to artificial intelligence,” she said.
The UK has been scouting for trade partners after Brexit and concluded its first trade deal with Australia last month. The UK hopes India will sharply cut its 150 per cent basic Customs duty on scotch whisky under the FTA, which would widely open up Britain’s third-largest exports market for scotch whisky by volume after France and the US. India hopes to gain from tariff reduction in labour-intensive sectors such as textiles, leather, jewellery, apart from cereals and pharma products.
Goyal said there was also great potential for increasing exports in service sectors like information technology, nursing, education, health care, including AYUSH and audio-visual services.
“India would also be seeking special arrangements for the movement of its people,” he said.
Commerce Secretary BVR Subrahmanyam said the “new age” FTA will have 16 chapters, including on intellectual property rights, digital economy, geographical indications (GIs), sustainability, anti-corruption, investment, and MSMEs, among others.
“The interim agreement is aimed to be completed by Easter (April 17). It will include tariff liberalisation in 60-65 per cent of traded goods while the final deal will include more than 90 per cent of items. Among 160 service lines, 50-60 will be included in the interim agreement while the final agreement will have a much larger scope. Many of the chapters, such as anti-corruption and MSME, will be on a best endeavour basis. So there will be no binding commitments,” he added.
Underlining the importance of the proposed agreement, Subrahmanyam said since India is not part of any regional trade deal, it stands ‘splendidly isolated’. “Even if there is 5-10 per cent of tariff disadvantage with a country like the UK, that is enough to kill our exports,” he said.