INDIAN-UK FTA (Syllabus: GS Paper 3 - Economy)

Context: Negotiations on the proposed free trade agreement (FTA) between India and the United Kingdom (UK), which commenced 19 months ago, are now in their final stages.

Key Points

• In 2022, India and the UK had launched the formal Free Trade Agreement (FTA) negotiations. Until then, both countries are contemplating an interim free trade area, which will result in reducing tariffs on most of the items.
• Both countries agreed to an early harvest scheme or a limited trade agreement to lower tariffs on a small set of goods apart from easing rules for select services.
• Further, they agreed to avoid “sensitive issues” and focus on areas where there is more complementarity.
• The agriculture and dairy sectors are considered sensitive sectors for India in trade talks.
• Also, a target of doubling the trade between India and the United Kingdom (UK) by 2030 was also set.