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What is the news?
India and the United Kingdom (UK) have formally launched negotiations for an ambitious Free Trade Agreement (FTA).
What will be the aim of the India-UK FTA?
The agreement aims to facilitate the target of doubling bilateral trade to $100 billion between India and the United Kingdom by 2030.
What will the India-UK FTA contain?
Initially, an interim FTA would be signed and subsequently a comprehensive deal by the end of the year would be signed.
The interim agreement will include tariff liberalisation in 60-65% of traded goods, while the final deal will include more than 90% of items.
This means that sensitive issues, such as allowing freer movement of skilled professionals from India, could be taken up during the final deal.
Moreover, Mutual Recognition Agreements (MRAs) on Pharma could also be signed, which could provide additional market access.
What is the significance of India-UK FTA?
Firstly, it is expected to increase our exports in Leather, Textile, Jewellery, Marine Products and processed Agri products.
Secondly, India is not part of any regional trade deal. Hence, FTAs like this will enable the country to achieve its ambitious merchandise export target of $1 trillion by FY28.
Source: This post is based on the article “India and UK Launch Free Trade Agreement Negotiations” published in PIB on 12th January 2022.