Negotiations in the free trade pact between India and the United Kingdom are now seen to focus on a reduction of tariffs by both countries on a variety of goods, the social security agreement as well as greater access to Indians for education and employment in the UK. The UK is also keen on getting more access to services sectors such as banking and telecommunication.
Trade talks between the two countries have resumed and the culmination of a successful FTA is seen as a top priority for both countries, amidst concerns over a global tariff war under the new US administration of President Donald Trump.
According to sources, there is an expectation that India will give tariff concessions to the UK on scotch whisky as well as automobiles following reduction of tariffs on bourbon whiskies and motorcycles that are seen to help the US.
At present, the import duty on Scotch whisky from the UK is 150%. Ahead of PM Narendra Modi’s visit to the US, India had recently lowered the customs duty on bourbon whisky to 50% as a potential sweetener.
India on its part is also keen to sign a social security or the Double Contribution Convention Agreement that would help Indian professionals working in the UK. At present, businesses have to bear double the cost of social security contributions – both in India and the UK, when they send skilled workers to the UK on a short-term basis. At present, India has such social security agreements with several countries including Belgium, Germany, and Australia.
Commerce Minister Piyush Goyal had on Monday highlighted that to bring balance in the opportunities and benefits for both countries, India had flagged the issue of giving attractive services offer in return for an attractive social security or a totalisation agreement from the UK.
Concluding the two-day FTA talks with Goyal on Tuesday, UK Secretary of State for Business and Trade Jonathan Reynolds said the proposed agreement is genuinely beneficial to both countries. “That is possible. That’s the prize. Getting it right is what we are here to do, and that’s what we are working very hard towards,” he underlined.
The FTA is expected to double or triple bilateral trade between India and the UK over the next 10 years from the current $20 billion.