CNBC TV18 | 5 May 2025
Sunset clause in BIT, data localisation, UK's new carbon tax may delay FTA with India: Sources
By Abhimanyu Sharma
In yet another slip between the cup and the lip for the proposed Free Trade Agreement (FTA) between India and the United Kingdom (UK), the negotiations are slated to take longer due to pending outstanding issues, as per sources.
India's Commerce and Industry Minister Piyush Goyal had visited London last week to meet the UK Secretary of State for Business and Trade Jonathan Reynolds to advance talks on three proposed pacts between both the countries: an FTA, a Bilateral Investment Treaty (BIT) and a social security agreement termed as the Double Contribution Convention Agreement (DCAA).
Sources indicated that discussions for a sunset clause in the BIT, data localisation and the UK's new carbon tax may delay the inking of the pacts with India, which were poised for announcement of a closure last week when differences arose over 4 to 5 issues. More meetings between the Indian and the British leadership are likely in future. The 26 chapters in the proposed India-UK FTA include goods, services, investments and intellectual property rights (IPR).
The India-UK FTA negotiations were launched on 13th January 2022. While 13 rounds of negotiations had been held till December 2023, talks on the 14th round were underway when negotiations were paused in March 2024, as both sides had gone into their respective General elections. 4.2% is the average duty on goods imported from India into the UK. Bilateral trade between both the two countries was recorded at $21.34 billion in FY 2023-24, up from $20.36 billion in FY 2022-23.
The Indian industry is demanding greater access for its skilled professionals from IT, ITeS and healthcare sectors in the British market, apart from market access for several goods at zero customs duty.
Meanwhile, the UK is seeking cuts in import duties on goods such as scotch whisky, electric vehicles, chocolates, lamb meat and several other products. The UK is seeking opportunities in Indian markets in sectors like telecommunications, banking, insurance, legal and financial services.
