UK yet to set up team to resume FTA talks with India

The FTA talks have yet to resume because the UK has not yet appointed its negotiating team…reports Asian Lite News

The UK-India free trade agreement (FTA) appears to be on hold for now. The newly elected United Kingdom (UK) government is yet to form a team to negotiate the 14th round of FTA talks with India. However, this process is likely to be finalised shortly.

The UK-India FTA, aimed at providing Britain with access to Indian markets while opening the British market to Indian businesses, was initiated in January 2024. There were hopes of completing the agreement before both countries faced general elections. So far, 13 rounds of talks have been completed by 2023, but the 14th round was halted, largely due to election schedules.

The FTA talks have yet to resume because the UK has not yet appointed its negotiating team. Negotiations were initially set to continue in July, following elections in both nations, but delays have persisted.

In the UK, the Labour Party won, ending 14 years of Conservative rule. During his first visit to India in July, UK Foreign Secretary David Lammy emphasised the importance of securing the FTA with India.

The trade agreement was featured in the manifestos of both major UK political parties. While many aspects of the deal have been settled, some key issues remain unresolved. The Indian delegation last visited the UK in April to address some of these matters.

A major point of contention has been localisation rules for British car manufacturers seeking benefits. Another area still under discussion is the import of whiskey from the UK. India-UK trade has declined over the years

The UK’s share of India’s trade has seen a decline over the last decade. In the financial year 2023-24 (FY24), the two countries traded goods worth $21.3 billion, representing 1.9 per cent of India’s overall trade, down from 2.1 per cent in FY14.

While India’s total trade grew at an annualised rate of 3.8 per cent between FY14 and FY24, trade with the UK lagged, growing at only 3 per cent annually.

In addition to the FTA, the two countries are collaborating on research. During his visit to India, Lammy announced the Technology and Security Initiative, which aims to promote cooperation on critical minerals, advanced materials, health tech, artificial intelligence, and semiconductors. This initiative is a part of the UK-India 2030 roadmap, signed by both nations in 2021.

UK and India launch major Infrastructure Financing Bridge

The United Kingdom and India have officially launched the United Kingdom-India Infrastructure Financing Bridge (UKIIFB), a new initiative designed to strengthen their financial and professional services collaboration, an official press release by the City of London stated.

This agreement, signed between the City of London Corporation and NITI Aayog, aims to channel sustainable infrastructure investments into India, leveraging the UK’s expertise in managing and structuring large-scale projects.

A key component of the UKIIFB is the newly announced steering committee, which includes representatives from various prestigious organizations such as HM Treasury, Aon, Arup, Mott MacDonald, Clifford Chance, and Sequoia Investment Management Company.

This committee will oversee the implementation of the initiative, focusing on projects such as national highways, regional rapid transport systems, and renewable energy ventures.

The steering committee will work on several objectives, including accelerating the mobilization of international private-sector investment into Indian infrastructure, providing policy recommendations to address investment barriers, and developing best practices for sustainable infrastructure projects.

Chris Hayward, Policy Chairman of the City of London Corporation, expressed his enthusiasm about the partnership, stating, “I am delighted to sign the UK India Infrastructure Financing Bridge welcoming a new chapter in the extensive business relationship between our two nations. The UK’s expertise in professional services, finance, and scaling major projects makes it a natural partner to meet India’s growing infrastructure needs, showcasing the City of London’s position as a global city.”

BVR Subrahmanyam, CEO of NITI Aayog, highlighted the significance of the UKIIFB, saying, “The UK India Infrastructure Financing Bridge (UKIIFB), jointly announced by the Hon’ble Finance Minister of India and the Chancellor of the Exchequer of the UK, represents a significant collaborative effort spearheaded jointly by NITI Aayog and the City of London.”

“This initiative underscores the commitment of both nations to work together in unlocking major infrastructure investment opportunities in India. This is a game-changer that not only accelerates India’s economic ascent but also strengthens its position on the global stage. It is not limited to connecting the two nations; it connects India to its aspirations of becoming a global powerhouse,” he continued.

Vikram Doraiswamy, the High Commissioner of India to the UK, remarked, “The team at the High Commission are delighted by the establishment of this financing bridge today. Announced as an objective at the last India – UK Economic and Financial Dialogue in September 2023, this structure is the culmination of over a year of shared effort. The UKIIFB is a striking testament to the complementarity of our bilateral economic relationship.”

Industry experts also weighed in on the partnership. Simon Harris, Managing Director for International Development Services at Mott MacDonald, noted, “Investment in climate-resilient infrastructure will play a key role in supporting India’s rapid economic and social development. The United Kingdom-India Infrastructure Financing Bridge (UKIIFB) is an excellent opportunity for investors to collaborate with India’s project shapers to accelerate investable and sustainable infrastructure development.”

Similarly, Sowmya Parthasarathy of Arup added, “Infrastructure is the foundation for India’s economic growth. Today’s announcement of the United Kingdom-India Infrastructure Financing Bridge (UKIIFB) comes at a pivotal moment.”

Mark Courtneidge of Aon UK and Anurag Gupta of Sequoia Investment Management Company also expressed their support, emphasizing the potential for the UKIIFB to facilitate significant infrastructure advancements in India.

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