India-UK Trade Pact Talks Extended Over Unresolved Issues

The much-anticipated free trade agreement (FTA) between India and the UK, alongside a bilateral investment treaty (BIT) and a social security agreement, faces delays as negotiations continue to tackle unresolved critical issues. Sources close to the matter reveal that while substantial progress has been made, certain sticking points remain, necessitating further discussions.

Key sticking points include the inclusion of a sunset clause in the investment treaty, the UK's newly introduced carbon tax, and India's push for data localisation requirements. These issues have delayed the announcement of the closure of negotiations, initially expected during Commerce and Industry Minister Piyush Goyal’s visit to London.

Market Access and Tariff Reductions at the Heart of Negotiations

India is keen on securing greater market access for its skilled professionals in the UK, particularly in the IT and healthcare sectors, and duty-free access for a range of goods. On the other hand, the UK is pressing for lower tariffs on exports like scotch whisky, electric vehicles, and confectionery, alongside expanded access to India’s services sector.

Bilateral trade between the two nations reached USD 21.34 billion in 2023-24, with the agreement under negotiation covering 26 chapters across goods, services, investment, and intellectual property rights.