India-UK FTA: New Delhi has kept British demands on data-related issues and duty concessions on the dairy sector out of the ambit of the proposed free trade agreement.
The negotiation for the agreement between the two countries is expected to be concluded by October end or November.
India has kept demands of the UK on data-related issues and offering any kind of duty concessions on the dairy sector out of the ambit of the proposed free trade agreement (FTA) being negotiated between the two countries in a bid to protect the interest of domestic players, said a PTI report quoting sources familiar with the matter.
However, New Delhi is considering providing duty concessions on auto, and certain confectionery items, they said.
The talks were boosted by a recent visit of Commerce and Industry Minister Piyush Goyal and Commerce Secretary Sunil Barthwal to London in July, where the duo held a series of meetings with various stakeholders including senior British officials.
“The visit of the Indian minister and secretary was very positive for the negotiations. Most of the issues are sorted out between the two countries,” said one of the sources.
Several rounds of consultations have reportedly taken place with the domestic players to provide duty concessions in the automobile sector.
As per sources, the Indian government will not touch any products in the dairy sector because of the sensitivities of the local players.
Since both India and UK are strong players in the services sectors, the two countries are negotiating hard for the relaxation of norms in sectors including IT, healthcare, accounting, education, medical practices, banking, insurance, legal, and telecommunications. Britain has also shown keen interest in areas such as banking, insurance, legal, and telecommunications.
Companies in the UK have raised concerns over data localisation norms in India. Another official said that India and the UK are very close to concluding negotiations for a proposed free trade agreement as the two sides are working to resolve differences on issues like investment treaties, intellectual property rights (IPRs) and rules of origin. Out of the total 26 chapters in the FTA, 19 have been closed. In the rules of origin chapters, the two countries are talking about product-specific rules, value addition, and certification.
The ‘rules of origin’ provision mention minimal processing that should happen in an FTA country to ensure that the final manufactured product can be called originating goods in that country. Under this provision, a country that has signed an FTA with India is not allowed to dump goods from some third country in the Indian domestic market by just placing a label on it. It needs to undertake a prescribed value addition in that product to export to India.
The bilateral trade between the countries rose from $17.5 billion in 2021-22 to $20.36 billion in 2022-23.
UK’s main imports from India include ready-made garments and textiles, gems and jewellery, engineering goods, petroleum and petrochemical products, transport equipment, spices, machinery and instruments, pharmaceuticals and marine products.
When it comes to the services sector, the UK is the largest market in Europe for Indian IT services, while in the field of investment, the UK is one of the top investors in India.
In 2022-23, India received $1.74 billion in foreign direct investment (FDI) from the UK compared to $1 billion in 2021-22.
Under such pacts, two trading countries significantly reduce or eliminate customs duties on most of the goods traded between them, in addition to relaxing norms to boost trade in services and investments.
