Context:
Union Commerce Minister Piyush Goyal met UK Trade Secretary Jonathan Reynolds in an unscheduled resumption of Free Trade Agreement (FTA) talks in London. Goyal’s return follows an earlier two-day visit this week that ended without a final deal. Negotiations began in January 2022, post-Brexit, but faced delays due to frequent changes in British leadership. The new Labour government has accelerated the process.
Status of Negotiations
- Few Issues Remain: Businesses close to the matter say only a few sticking points are left.
- Finalized Areas: Tariff reductions on whisky and automobiles have reportedly been agreed upon.
- Constructive Dialogue: Both governments described the latest discussions as “constructive”, indicating substantial progress.
Parallel Negotiations
- Bilateral Pacts: India and the UK are also negotiating separate treaties on investment protection and social security alongside the FTA.
- Investment Treaty Clause: Expected to include investor-state dispute settlement (ISDS) provisions, enabling companies to sue governments over policy changes impacting investments.
- US Tariff Concerns: Both India and the UK are seeking separate trade negotiations with the US to resolve tariff-related issues.
Implications
- A successful FTA would boost bilateral trade, provide duty benefits, and offer legal protection for investors.
- The deal may serve as a model for future post-Brexit UK trade pacts with emerging economies.
