Economy
India's First Comprehensive FTA With An Industrialised Nation Nears Completion, Here's All That We Know About It
Prime Minister Narendra Modi with his British counterpart Rishi Sunak.(X)
India and the UK are expected to finalise a proposed free trade agreement (FTA) by the end of this month.
This will mark India's first comprehensive deal with an industrialised nation, aiming to boost bilateral trade beyond the current $20 billion annual business.
The Indian government has invited UK Prime Minister Rishi Sunak to visit India on 28 October to sign the ambitious pact.
This invitation indicates the significance and commitment both countries have towards strengthening their economic ties.
On Monday (9 Oct), senior officials from the commerce and industry ministry presented the details of the agreement to the Prime Minister's Office.
This highlights the thoroughness and attention given to ensure a successful outcome of the negotiations.
Trade negotiators recently convened in the UK to finalise the details of the pact. The discussions primarily revolved around two contentious issues: rules of origin and intellectual property rights.
According to a report from The Economic Times, India has extended an invitation to the UK Prime Minister to sign the pact on 28 October.
Both parties are eager to formalise the agreement.
The pact will consist of 26 chapters covering various aspects.
Currently, negotiations are focused on the rules of origin chapter, where topics such as product-specific rules, value addition, change in chapter headings, and certification are being discussed. While progress has been made, further deliberation is still required. .
India has expressed the need for assurance from the UK that it will not be used as a channel for goods from other countries.
This is due to India's concern about its growing trade deficit, which reached $263 billion in FY23, up from $191 billion the previous year.
There is a perception on the UK side that the Indian Customs process is overly bureaucratic and requires extensive paperwork.
The life sciences and biotech sectors in the UK have proposed 37 changes to India's intellectual property rights laws.
The UK and the European Union (EU) have separately requested modifications to India's Patents Act to allow for 'evergreening' of patents, particularly in the pharmaceutical industry.
However, Section 3(d) of the Patents Act currently prohibits the granting of 'evergreening' patents, which are additional patents for drugs without therapeutic benefits.
India considers this practice as extending the monopoly of a patent, which is a sensitive issue for the country.
Given that both countries will have elections next year, it is possible that there may be differences of opinion on certain matters.
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