India and the UK have concluded the fifth round of talks for a free-trade agreement (FTA). Negotiation officials undertook these technical talks in a hybrid fashion – with some of the teams meeting in New Delhi, India, and the majority of officials joining virtually. The officials will continue to work throughout the summer to conclude the majority of talks on a comprehensive and balanced India-UK FTA by the end of October 2022, according to an official statement.
For this round of negotiations, technical experts from both sides came together for detailed draft treaty text discussions in 85 separate sessions covering 15 policy areas.
According to official data, the bilateral trade in goods between India and the UK stood at $16 billion in 2021-22 as compared with $13.11 billion in 2020-21, a jump of 22.17 per cent. Exports worth $9.43 billion were shipped in 2021-22, while imports worth $6.59 billion were received in the same year. This gives a trade balance of $2.84 billion in the financial year 2021-22.
The trade between the two countries had stood at $15.45 billion in 2019-20, $16.87 billion in 2018-19, and $14.49 billion in 2017-18.
In 2021, India was the UK’s 15th largest trading partner, and the UK is India’s 18th largest trading partner with manufacturing exports accounting for over 90 percent of India’s export to the UK, consisting of clothing, medicinal and pharmaceutical products, metal manufacturers, organic chemicals, and precious stones.
India has signed 13 regional trade agreements (RTAs)/ FTAs with various countries/ regions namely, Japan, South Korea, countries of ASEAN region and countries of South Asian Association for Regional Cooperation (SAARC) Mauritius, United Arab Emirates and Australia. India’s merchandise exports to all these countries/regions have registered a growth in last 10 years.
In addition, India has also signed 6 preferential trade agreements (PTAs), including Asia Pacific Trade Agreement (APTA). All of India’s RTAs, as listed in the table above, have exit clauses.
Article 32 of Asia Pacific Trade Agreement (APTA) mentions that “any participating state may withdraw from this Agreement, such withdrawal to take effect six months following the day on which written notice of the same is served to the participating states through the Executive Secretary of ESCAP. The rights and obligations of a participating state which has withdrawn from this Agreement shall cease to apply as of that date”.
In June, India also started talks for an FTA with Canada, on the sidelines of the 12th ministerial conference of the World Trade Organization (WTO) at Geneva.
On May 1, India and the UAE signed the Comprehensive Economic Partnership Agreement. The CEPA, which has already come into effect, is likely to boost trade between India and the UAE from $60 billion to $100 billion in the next five years, India’s Ambassador to the UAE Sunjay Sudhir has said.
India and Australia also signed a landmark free-trade agreement, the economic cooperation and trade agreement, in April. This was India’s second such trade agreement in 2022 after inking a similar deal with the UAE in February.
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