What is India-UK Free Trade Agreement and why it is significant?

India-UK free trade agreement upsc: India and UK on January 13, 2022, launched the formal negotiations for the free trade agreement. The Union Minister of Commerce and Trade Piyush Goyal, while speaking during the event, stated that the India-UK free trade agreement will expand the cooperation in technology, tourism, education, startups, climate change, etc.

While addressing a press conference with UK Secretary of State for International Trade Anne-Marie Trevelyan, Goyal further added that the terms of reference of the free trade agreement have been finalized and formally endorsed by both India and UK, and therefore the formal negotiations for FTA have been launched.

Earlier in May 2021, Prime Minister Modi and Prime Minister of Britain Boris Johnson had announced the India-UK Trade Partnership setting an ambitious target to double the bilateral trade by 2030.

Delhi: India, UK launch negotiations for the free trade agreement

"We aim for this to be a future-facing deal, accelerating the business that we do together in cutting-edge sectors that're reshaping the global economy," says UK Secy of State for Int'l Trade Anne-Marie Trevelyan pic.twitter.com/QdcDM6iwEn

— ANI (@ANI) January 13, 2022

India-UK Free Trade Agreement: Why is it significant?

The free trade agreement between India and the United Kingdom aims at creating huge benefits for both countries and can boost the total trade by up to euro 28 billion a year by 2035. It will also facilitate increasing the wages by up to euro 3 billion across the UK.

Negotiations for a Free Trade Agreement between India & UK have formally been launched today, to double the bilateral trade by 2030; 1st round of negotiations to begin on Jan 17, & future rounds to take place approx every 5 weeks: India-UK Joint Media Statement pic.twitter.com/phH7aYXmNH

— ANI (@ANI) January 13, 2022

What is India-UK Free Trade Agreement?

1. The agreement signed between the two countries will help in expanding the cooperation in various sectors including technology, tourism, education, startups, climate change.

2. India and UK, under FTA, will be proactively and regularly engaging with each other deliberating on different aspects of their bilateral relationship.

3. Under the Free Trade Agreement, India hopes to fast-track the interim agreement or n early-harvest agreement where it will hope to capture low-hanging fruits which will further provide opportunities for the businesses on both sides.

4. The free trade agreement between India and UK will help both countries in substantially enhancing the volume of trade in goods and services.

5. The agreement will introduce a very multidimensional economic partnership between the two nations as both India and UK share vibrant democracies, cultural ties, and rich history.

Background:

The launch of the Free Trade Agreement between India and the UK can be seen as a major move since the UK’s exit from the European Union in support of free and fair trade in the Indo-Pacific.

The UK also has similar negotiations with Mexico, Canada, and the Gulf in the pipeline, besides the members of the GBP 8.4 trillion Comprehensive and Progressive Agreement for Trans-Pacific Partnership Trade Bloc.