India-UK Trade Deal: A New Era of Economic Partnership

The recent announcement of the India-UK Free Trade Agreement (FTA) marks a significant milestone in the series of bilateral FTAs negotiated by India, including those with Australia, the UAE, and the EFTA countries. This strategic move showcases India's deliberate approach to expanding its FTA footprint, aiming to secure market access for Indian goods and foster international cooperation.

By Himanshu Tewari

The successful negotiation of the FTA with the UK, a recent member of the EU, sets a positive precedent for ongoing India-EU FTA discussions. These negotiations, stalled for over thirteen years, have been hindered by issues such as market access for European luxury cars and alco-beverages, and India's data secure status.

Breaking New Ground in Trade Negotiations

The India-UK FTA introduces innovative solutions to longstanding challenges, such as a quota-based system for luxury car imports and reduced duty rates on whiskey. These developments not only benefit bilateral trade but also pave the way for a potential India-EU FTA, signaling a win for India's foreign and trade policies.

As the details of the India-UK FTA are yet to be fully analyzed, questions remain regarding the implementation of quotas and the origin of imported goods. However, the government's flexibility and decisiveness in addressing these issues are commendable, promising to boost economic activity and strengthen international relations.

The author is Himanshu Tewari, Partner, Trade and Customs, KPMG in India.