India-UK to resume FTA talks on February 24, focus on trade, investments, and market access

Negotiations for the long-awaited free trade agreement (FTA) between India and the UK set to restart, aiming to boost bilateral trade and economic cooperation.

India and the United Kingdom are expected to resume talks for the proposed Free Trade Agreement (FTA) from February 24, as both nations look to strengthen bilateral trade and investment ties, a senior official confirmed. The discussions had stalled after the 14th round, primarily due to the general election cycles in both countries.

UK Trade Minister to Visit India for Key Discussions

The UK Trade Minister is expected to visit New Delhi soon to accelerate negotiations, which began in January 2022. The proposed agreement is designed to enhance market access, reduce tariffs, and facilitate investments between the two economies.

What the FTA Aims to Achieve

A free trade agreement typically involves eliminating or significantly reducing customs duties on most goods traded between the two countries. It also includes easing trade norms for services and bilateral investments, encouraging smoother economic ties.

Key Demands from Both Sides

India’s Priorities

Greater access for Indian skilled professionals in the UK market, particularly in IT and healthcare.
Market access for several Indian goods at zero customs duty.

UK’s Demands

Significant reduction in import duties on British products like scotch whiskey, electric vehicles, lamb meat, chocolates, and confectionery.
More access for UK service sectors in India, particularly in telecommunications, legal, financial services, banking, and insurance.

Push for Higher FDI in Insurance to Aid FTA Talks

The negotiations are expected to gain momentum after Finance Minister Nirmala Sitharaman proposed raising the foreign investment cap in the insurance sector to 100% during the Union Budget 2025-26 presentation. The move is part of India’s next-generation financial sector reforms, potentially aligning with UK’s interests in the Indian insurance market.

Ongoing Negotiations for Bilateral Investment Treaty (BIT)

Alongside the FTA, both nations are working on a Bilateral Investment Treaty (BIT) to facilitate smoother and more secure investments. The FTA consists of 26 chapters, covering goods, services, investments, and intellectual property rights.

Bilateral Trade Growth Between India and UK
Trade relations between the two nations have been on the rise:

2023-24: USD 21.34 billion
2022-23: USD 20.36 billion

With discussions resuming, both India and the UK aim to finalize a comprehensive trade agreement that will strengthen economic ties and promote growth across multiple sectors.