India and the UK to begin trade negotiations
Negotiations over a proposed India-UK Free Trade Agreement (FTA) will begin today.
Negotiations will be led by Indian Minister of Commerce and Industry Piyush Goyal and the British Secretary of State for Foreign, Commonwealth and Development Affairs Liz Truss. Initially affirmed in July of 2020, the Agreement seeks to strengthen the two nations’ already robust economic ties.
The negotiations are set to last until early 2022 with an interim ‘early harvest’ agreement to be announced in March. The initial pact will likely include tariff reductions and market access concessions for both parties in key industries including textile and pharmaceutical manufacturing.
In the wake of Brexit, the UK has sought to expand its international trade with a series of FTAs and India is a key target of these efforts. So, expect the UK to be eager to reach an agreement quickly, potentially offering additional concessions to do so.
Despite eagerness to reach a deal, negotiations may stall on the issue of agricultural exports. Shares of UK agricultural exports have fallen dramatically in the last 20 years, and the government has expressed hesitance regarding any reduction in tariffs or barriers on agricultural products. As such, expect the majority of contention to be focused on this area.
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