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India, UK close to concluding FTA talks, says official | Business News

After having achieved broad consensus on most contentious issues for the free trade agreement, India and the UK will now focus on discussing three key issues — investment treaty, rules of origin and intellectual property rights — in its next round of discussions in August, a senior government official said.

The official said India and the UK are “very close” to concluding negotiations for the proposed free trade agreement and discussions on 19 out of total 26 chapters have been closed.

In the recently concluded 11th round of talks, both countries have been able to reach broad consensus on matters related to automobiles, whisky and market access, the official said, adding that till the full pact comes into force, it’s important to note that “nothing is agreed till everything is agreed”.

The negotiations for the India-UK FTA are likely to be concluded much before the end of this year. “We are very close and are trying to conclude the talks as early as possible…remaining issues include IPRs, rules of origin and investment treaty,” the official said.

In the rules of origin chapters, both countries are talking about product specific rules, value addition, change in chapter heading, and certification. “The UK will be the first country with which we are going to have a comprehensive FTA which we have not signed with any other developed country as such,” the official said.

The ‘rules of origin’ provision prescribes minimal processing that should happen in an FTA country so that the final manufactured product may be called originating goods in that country.

Under this provision, a country that has signed an FTA with India cannot dump goods from some third country in the Indian market by just putting a label on it. It has to undertake a prescribed value addition in that product to export to India. Rules of origin norms help contain dumping of goods. Also, the two nations are negotiating an investment treaty as a separate agreement (bilateral investment treaty) and it would be concluded simultaneously with the free trade agreement.

The negotiations for the FTA between the two countries had slowed down after the economic and political crises in the UK. The overarching focus from New Delhi’s perspective is to ensure a comprehensive deal without ceding too much ground, as it will serve as a template for all upcoming trade pacts, including ones being discussed with the EU (European Union) and the EFTA (European Free Trade Association) countries viz., Iceland, Liechtenstein, Norway and Switzerland

The Indian industry is demanding greater access for its skilled professionals in the UK market and entry of Indian whisky by removal of conditions pertaining to the three-year minimum maturity period. The UK is also looking for a significant cut in the import duties on Scotch whisky and seeking more opportunities for UK services into Indian markets.

The bilateral trade between the countries increased to $20.36 billion in 2022-23 from $17.5 billion in 2021-22.

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