Examine the significance of India-UK free trade agreement (FTA). Also, highlight the factors impeding the conclusion of the India-UK FTA.

A free trade agreement (FTA) is an agreement between two or more nations to reduce barriers of imports and exports among them by significantly reducing or removing government tariffs, subsidies, etc.

Significance of India-UK FTA:

• After Brexit, the UK can sign a trade pact with other nations.
• India and UK started negotiations for an FTA in the start of year 2022, for improving trade and relations between the two nations.
• Both countries are actively engaged in bilateral trade and have multidimensional strategic partnership.
• India is the UK’s 12th largest trading partner, while the UK is the seventh largest export destination for India.
• It will give a boost to the ‘Make in India’ programme.
• Strengthening ties with the UK will help India to tackle China.

Factors impeding the conclusion of FTA:

• The FTA is in the final stage of negotiation but the UK has said that it will only sign the FTA if it meets UK’s interests.
• The UK is concerned that India is trying to extract a few further concessions in the contentious areas of imported whiskey and automobiles.
• Another bone of contention is India’s push for relaxation on visas for Indian workers in the UK.
• Issues related to data localisation.

Way forward:

There are growing fears that the proposed India-UK FTA may be watered down. The FTA is important for both countries to boost trade and investment. Hence there is a need to remove all the bottlenecks impeding the conclusion of FTA.