The India-UK Free Trade Agreement (FTA) talks with the new UK government are set to commence by the end of January, a senior government official said on Thursday.
Separately, the Commerce and Industry Ministry, in a statement, said the proposed FTA negotiations between India and the European Union (EU) require political direction to achieve a commercially meaningful deal.
The renewed push for trade deals with the UK and EU comes as India is focusing on countries where significant export gains are expected, rather than pursuing agreements with smaller countries that may offer more market access to the partner nation.
To achieve the same, the commerce ministry is developing a new Standard Operating Procedure (SOP) aimed at optimising the processes for negotiating future trade agreements.
This follows several trade agreements, including the pact with the UAE that took effect in February 2022 and the one with the Association of Southeast Asian Nations (ASEAN) signed in 2010, which have resulted in significantly higher imports compared to exports, raising concerns over potential breaches of rules of origin.
“The FTA negotiations, after nine rounds of intense engagement, require political direction to arrive at a commercially meaningful deal while understanding each other’s sensitivities,” the ministry said in its statement.
This follows Commerce Minister Piyush Goyal’s meeting with the ambassadors of the European Commission delegation on Thursday.
With the Carbon Border Adjustment Mechanism (CBAM) continuing to be a sticking point in India-EU negotiations, the minister, as per the statement, asserted that any discussions on sustainability must respect the principle of ‘Common but Differentiated Responsibilities (CBDR)’, and the implementation of such measures should consider differing development paths.
Goyal highlighted that the Indian economy is expected to grow at an annual rate of 7-8 percent, positioning it to become the third-largest economy in the world within the next few years. Thereafter, rapid and exponential growth is projected to enable India’s GDP to reach $35 trillion by 2047.
“Acknowledging the significant untapped economic potential, the European side emphasised that both sides stand to gain immensely by integrating their economies and strengthening resilience in supply chains. The interaction also provided an opportunity to review progress in the India-EU Trade and Technology Council. India is the only country, apart from the United States, with which the EU has such a mechanism,” the ministry added.
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