UK Prime Minister Rishi Sunak will travel to India late October to sign the ambitious agreement that is expected to spur two-way trade in goods and services between the two economies as well as increase capital flows in the form of foreign direct investment.
Early last month, Sunak while being here for the G20 Leaders’ Summit had said he and Prime Minister Narendra Modi were keen to see a “comprehensive and ambitious trade deal” concluded, but said that there was “still some hard work to be done,” and that, the pact must “work for both the countries.”
However, the Bilateral Investment Treaty (BIT) will be signed later as common ground has not been reached so far, he added. Till a BIT is signed, the India-UK Infrastructure Financing Bridge will address any bilateral issues in investments, the official added.
BIT, the Rules of Origin and intellectual property rights (the latter two under the FTA) were some of the issues that were proving to be contentious in the negotiations. From the Indian side, the demand for easier visas for professionals was seeing some resistance from the UK.
The differences in services have been sorted out on the lines of the UK’s FTA with Australia which came into force from May 2023, the source said.
The FTA talks between India and the UK started in early 2021.
In the services sector, the UK demanded national treatment for its services businesses and greater freedom for its professionals to operate in India. This has been agreed to. National treatment means treating foreigners and locals equally with regard to rules and regulations. It also means equal access to opportunities for overseas operators and not doing anything that puts them at a disadvantage.
The areas of services that the UK was interested in are financial services, business and professional services, and transport services. It also wanted a liberalised visa regime for its business travellers to give them greater opportunities to operate in India. “In services, professionals moving from India to the UK or the other way round are most likely to be Indian nationals or of Indian origin, so the issues have been sorted out,” the source said.
