Hectic negotiations are ongoing between the United Kingdom and India for a Free Trade Agreement (FTA), which could be signed by the middle of 2023. A framework to strengthen economic cooperation between the two countries, the FTA comprises 26 chapters, of which negotiations have closed on 14.
The earlier deadline to close the talks was October end, but this was missed due to political developments in the UK. The key sectors that are likely to benefit from the FTA include textiles and handicrafts. “The UK has a big consumer market and appetite for Indian textiles and handicrafts. This FTA would also create more employment opportunities for women who work in these sectors,” according to Kevin McCole, MD, UK -India Business Council.
Digitally driven services would be another focus area. “Digital trade would be transformative. Both countries are knowledge-based economies and both stand to gain, McCole said. India’s new data bill, which has eased data localisation norms, wherein notified countries can store data, also creates opportunities for India and the UK to work on data together, he indicated. Both countries are hopeful of bringing in the FTA by early next year, for it to be implemented before 2024.
Gain for Indian liquor business
India exported about $400,000 worth of alcoholic beverages in 2021-22 against imports to the tune of $192 million from the UK, according to government data.
The Indian liquor sector stands to benefit from the (FTA), analysts say. Among the many proposals as part of the FTA, the sector is likely to see a steep cut in the import duty for whiskey which is currently at 150 per cent and it will be gradually brought down to 30 per cent over the years.
The government would gradually slash import duty on high-end products from 150 per cent to 100 per cent in the first years, 50 per cent in the second and 30 per cent by the end of the third year once the FTA is signed between the two countries. This move is also expected to open a big export market for liquor in the UK, according to media reports.