INDIA-UK PACT (Syllabus: GS Paper 2 – IR)

News-CRUX-10     15th November 2023        
output themes

Context: The external affairs minister of India, recently on a trip to the UK, has emphasized the joint commitment of India and the UK to a free trade agreement (FTA), expressing optimism that the two nations will soon find a "landing point" beneficial for both parties.

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.

India-UK Relationship

  • Political Relationship: India’s political system influenced by UK. – Shared democratic values. – Collaboration on global issues. – Support for UN Security Council seat and NSG membership. – Joint declaration for annual Summits and meetings.
  • Defence Collaboration: Strategic partnership since 2004. – Joint military exercises. – Cooperation in cyber security and maritime security. – “Make in India” campaign involvement. – Carrier Strike Group deployment in Indian Ocean.
  • Economic Relations: The Joint Economic and Trade Committee (JETCO) was established in 2005. – India-UK Free Trade Agreement talks. – Bilateral trade and investment growth.