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13th October 2022 (6 Topics)

India & U.K. FTA & Issues


Despite the setback over Suella Braverman (U.K. Home Secretary) comments on Indian migrants (discomfort about “open borders" with India), officials are optimistic to conclude a framework India-UK FTA.


What are the persistent issues between India and UK?

  • Illegal Migrants
  • Mobility
  • Data Localization
  • Reducing tariffs on Scotch whisky
  • Access to legal services
About Free Trade Agreement: It is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange. The concept of free trade is the opposite of trade protectionism or economic isolationism.

India’s Trade with the UK:

  • The UK remained the sixth largest investor in India, with a cumulative investment of approximately USD 31.92 billion during FY 2000-22.
  • This constituted around 5.4% of the total Foreign Direct Investment (FDI) into India.
  • India’s trade in goods and services with the UK amounted to USD 31.34 billion in FY 2022, as against USD 19.51 billion in 2015.
  • 618 UK Companies have been identified in India, they together employ approximately 66 lakh people. And have a combined turnover of Rs 3,634.9 billion.

Importance of Indo-UK Partnership

  • India is a key strategic partner for the UK in the Indo-Pacific both in terms of market share and defense.
  • For Britain, a successful conclusion of an FTA with India would provide a boost to its ‘Global Britain’ ambitions. As the UK has sought to expand its markets beyond Europe since Brexit.
  • Britain has been trying to seize opportunities in the growing economies of the Indo-Pacific to cement its place on the global stage as a serious global actor.
  • The British would be better able to achieve this goal with good bilateral relations with India.

For India:

  • The UK is a regional power in the Indo-Pacific as it possesses naval facilities. In Oman, Singapore, Bahrain, Kenya, and British Indian Ocean Territory.
  • The UK has also confirmed £70 million of British International Investment funding to support the usage of renewable energy in India. which will help in building renewable energy infrastructure and developing solar power in the region.
  • India has sought easy market access for Indian fisheries, pharma, and agricultural products besides duty concession for labor-intensive exports.

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