India to Resume FTA Negotiations with the UK in 2025 as Trade Relations Strengthen
India will restart Free Trade Agreement talks with the UK in 2025, focusing on boosting exports and achieving economic stability. Recent trade trends show significant growth in bilateral trade, underscoring the urgency for a stable agreement amid geopolitical challenges. Despite prior disruptions, both nations are optimistic about finalizing a mutually beneficial deal.
India is set to resume negotiations for a Free Trade Agreement (FTA) with the United Kingdom in early 2025, having designated the UK as a “priority country”. This decision follows discussions between Indian Prime Minister Narendra Modi and UK Prime Minister Sir Keir Starmer on the sidelines of the G-20 Summit in Brazil. The FTA aims to significantly boost Indian exports to the UK, potentially quadrupling them by 2030 and assisting India in achieving its ambitious $1 trillion merchandise export goal by the fiscal year 2030. The negotiations were initially suspended in May 2024 after completing 14 rounds since January of that year. However, Britain’s interest in forging an FTA stems from a need for stable food and product supplies amidst ongoing geopolitical uncertainties, which could help mitigate inflation. Recent trade statistics indicate a notable rise in trade between the two nations, with UK exports to India increasing by over 30% in the first half of fiscal year 2024-2025. Despite previous advancements—five rounds of discussions were held by mid-2022—the talks faced setbacks due to political changes in the UK, notably following the departure of Boris Johnson and subsequent governmental shifts. The Rishi Sunak administration resuscitated the talks but encountered unresolved issues regarding import duties and business mobility. The Indian commerce ministry has expressed optimism regarding the potential for a balanced and mutually advantageous agreement, looking forward to collaborating closely with the UK’s negotiation team.
The Free Trade Agreement negotiations between India and the UK began in early 2022. This cooperation has been influenced by changing political landscapes in the UK, impacting the pace and progress of the discussions. The initial aim was to complete the agreement by significant cultural dates like Diwali, reflecting the importance both nations place on commercial relationships. Current external pressures like inflation and supply chain stability have heightened the urgency for both countries to solidify their trade ties, as both nations are increasingly reliant on each other for various goods and services.
The forthcoming resumption of the India-UK FTA negotiations in 2025 reflects a strategic move aimed at enhancing trade relations between the two nations. With significant potential for increased exports and a shared goal of economic stability in the face of global uncertainties, both governments are working towards a comprehensive and sustainable trade agreement. Future discussions will seek to address outstanding issues and facilitate a successful conclusion to the negotiations.
Original Source: www.hindustantimes.com
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