India and UK trade ministers discuss advancing FTA negotiations

India-UK FTA: Commerce and Industry Minister Piyush Goyal met UK Secretary of State for Business and Trade Jonathan Reynolds in Italy to discuss advancing negotiations on the proposed free trade agreement (FTA), according to an official statement on Wednesday.

The bilateral meeting occurred on the sidelines of the G7 Trade Ministers' meeting in Reggio Calabria, Italy. The India-UK FTA talks began in January 2022, but the 14th round stalled as both nations entered their general election cycles.

"Goyal congratulated Mr. Jonathan Reynolds on his appointment and discussed deepening bilateral economic relations. The conversation included plans to take forward the discussions on FTA between India and the UK," the commerce ministry said.

An FTA involves trading partners significantly reducing or eliminating customs duties on most goods traded between them. They also ease norms to promote trade in services and investments. There are pending issues in both the goods and services sectors.

The Indian industry is demanding greater access for its skilled professionals from sectors like IT and healthcare in the UK market, as well as market access for several goods at zero customs duty. Conversely, the UK is seeking a significant reduction in import duties on goods such as scotch whiskey, electric vehicles, lamb meat, chocolates, and certain confectionery items. Britain also wants more opportunities for UK services in India, including telecommunications, legal, and financial services.

The two countries are also negotiating a bilateral investment treaty (BIT). The agreement comprises 26 chapters, covering goods, services, investments, and intellectual property rights.

Bilateral trade between India and the UK increased to $ 21.34 billion in 2023-24 from $ 20.36 billion in 2022-23. The Labour Party's recent election manifesto committed to clinching the deal.

Goyal also held meetings with other counterparts at the G7 Trade Ministers' meeting. Discussions with Valdis Dombrovskis, Executive Vice President of the European Commission, focused on promoting India-EU trade and economic collaborations, including ongoing FTA negotiations. Additionally, Goyal and New Zealand's Trade Minister Todd McClay explored opportunities to enhance bilateral trade and investment ties for mutual growth.