UKIBC: FTA negotiations should conclude before general elections in India and UK

The UK-India Business Council (UKIBC) has urged for the timely conclusion of negotiations on the Free Trade Agreement (FTA) between India and the United Kingdom. The trade body, which aims to foster trade and investment between the two countries, emphasized the importance of finalizing the FTA before the upcoming general elections in both nations.

Need for Expediting Negotiations

Thirteen rounds of negotiations have already taken place between India and the UK for the proposed FTA. However, with general elections scheduled in both countries next year, concerns have arisen about potential delays in the negotiations. Kevin McCole, the Managing Director of UKIBC, highlighted the significance of concluding the talks before the elections to avoid a pause in the process.

McCole pointed out that while the election date in the UK has not been confirmed yet, it could fall between May and November 2023. This poses a risk of halting the negotiations until the elections in both countries are completed. He stressed the need to accelerate the negotiations to ensure a smooth transition and maintain the momentum in trade relations.

Importance of Bilateral Investment Treaty

In addition to the FTA, McCole also emphasized the importance of a bilateral investment treaty between India and the UK. He believes that such a treaty would facilitate increased investment flows from the UK to India and vice versa. Currently, out of the GBP62 billion invested globally by the UK in 2021, only GBP2 billion was directed towards India. McCole expressed optimism that a bilateral investment treaty would attract a larger share of the UK's global investments to India.

Tariff Reduction on Textiles

McCole also touched upon the issue of tariffs on textiles imported from India to the UK. Currently, the tariff on textiles from India stands at 12%, while countries like Bangladesh and Sri Lanka enjoy lower tariffs. McCole indicated that the UK is open to reducing tariffs on textiles from India, potentially creating more opportunities for Indian exporters and boosting trade in this sector.

The UKIBC's call for the swift conclusion of the India-UK FTA and the signing of a bilateral investment treaty underscores the importance of strengthening economic ties between the two countries. With both nations set to hold general elections next year, there is a limited window of opportunity to finalize the agreements. By prioritizing these negotiations and addressing concerns such as tariff reduction, India and the UK can unlock significant potential for increased trade and investment, benefiting businesses and consumers on both sides.