The negotiations for the proposed trade agreement between India and the United Kingdom are at an advanced stage, and both sides are working together to iron out the main differences on remaining issues, a top government official said on October 13, 2023.
The Indian Commerce Secretary, Sunil Barthwal, said that the negotiations on tough issues are underway: “These negotiations are at an advanced stage. These are going on, and we are ironing out the differences. We should wait till these negotiations are over because the 13th Round is going on.
These remarks assume significance as both sides are expected to conclude the talks this month and may sign the deal in the last week. A majority of the 26 chapters are closed the remaining high-level engagements at various levels are ongoing. An official delegation from the UK is here for the negotiations. A team led by Commerce Secretary Sunil Barthwal was in London recently to give an impetus to the talks.
Bilateral Investment Treaty
The UK team dealing with trade and investment-related matters is already here, and the talks for the Bilateral Investment Treaty (BIT) with finance ministry officials are progressing at a fast pace. The investment treaty is being negotiated as a separate agreement between India and the UK. These investment treaties help in promoting and protecting investments in each other’s country. The main point of contention is about the manners in which the disputes will be settled.
Significance of the BIT
The BITs help in promoting and protecting investments in each other’s countries. India has proposed to first utilise all local judicial remedies for the settlement of disputes before arriving or initiating an international arbitration.
India-UK Automobile Sector
To provide duty concessions in the automobile sector, several rounds of negotiations and consultations have been held with the domestic players in India. According to an expert, UK-based automobile giants like Bentley, JLR, Rolls Royce and Aston Martin cater to the luxury segment, while Indian manufacturers are mostly in the mass segment and are dominated by small and mid-size passenger cars and two-wheelers.
The Indian industry is demanding greater access for its skilled professionals from sectors like IT and healthcare in the UK market, besides market access for several goods at nil customs duties. On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, automobiles, lamb meat, chocolates and certain confectionery items.
Britain is also looking for more opportunities for UK services in the Indian Markets and in segments like telecommunications, legal and financial segments, especially banking and insurance.
Indian Alcohol Industry
Alcoholic Beverage industry body, Confederation of Indian Alcoholic Beverages Companies (CIABC), Director General Vinod Giri said that for scotch whiskey (Bottled), India could consider reducing the import duties to 100 per cent immediately from 150 per cent and then 50 per cent in the ten years. Similarly, for bulk imports, the duties can be cut down to 100 per cent immediately and then 50 per cent in ten years as the bulk imports are treated as intermediate goods in the domestic market. The Indian alcoholic beverage market is worth 52 billion USD.
Replacing France, India became the top buyer of Scotch Whiskey by volume in the year 2022, according to the Scotch Whiskey Association. The bilateral trade between India and the United Kingdom increased to USD 20.36 billion in 2022-23 from USD 17.5 billion in 2021-2022.
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