The Last Mile: Is the India-UK Free Trade Agreement About to Rewrite Economic History?

India's Commerce Minister Piyush Goyal will sit down with UK's Trade Minister Jonathan Reynolds in London on Monday and Tuesday, in a high-stakes bid to iron out the final remaining obstacles in the much-awaited India-UK Free Trade Agreement (FTA). The meeting marks a high-profile political push as the two countries seek to seal a deal that has taken close to three years of negotiations.

 

Key Highlights:

 

Last-Minute Negotiations: The FTA is said to be 90% finalized, with consensus on 24 of the 26 chapters. Tariffs on British whisky, cars, medicines, and rules of origin remain, which are likely to be finalized at the ministerial level during this trip.

 

Mobility and Visas: A deal has been struck on the controversial topic of mobility, with the UK committing to provide some 100 new visas each year for Indian workers. The concession clears the way for wider consensus, although it is a controversial issue in the UK politically.

 

Investment Treaty & Dispute Settlement: In conjunction with the FTA, negotiations are being held for a bilateral investment treaty (BIT), with the dispute settlement mechanism being the principal sticking issue. India has shown intentions of overhauling its BIT model for enhanced foreign investment inducement.

 

No New Full Rounds of Negotiation: Authorities confirmed that there is little chance of a new full round of negotiations, as negotiations have speeded up and are now concentrated on solving fundamental issues directly between ministers.

 

Strategic Significance: The two sides consider the FTA a historic post-Brexit milestone, assuring deeper market access, more stable investment links, and a new era of economic partnership between two leading world economies.

 

With hope high, this week's ministerial talks may be the last step before a historic trade agreement is inked.

 

Sources: Politico, The Indian Express, CNBC-TV18