India and United Kingdom Free Trade Agreement (FTA) Negotiations
Recently India and United Kingdom have started Free Trade Agreement (FTA) negotiations. The objective of these negotiations is to conclude an FTA by the end of 2022. Along with this, work on an interim agreement or an early harvest plan is to be completed by March 2022.
- The Early Harvest Plan is the precursor to the FTA. It helps in identifying certain products to liberalize tariffs of two mutually trading countries. This scheme is used when FTA is being negotiated.
- A target has been set to double the bilateral trade between India and the United Kingdom by 2030. It has to exceed $100 billion.
- Also, areas providing greater complementarity will be focused. For example- Agriculture and Dairy sector are sensitive sectors for India.
Importance of FTA for India
- There will be an increase in goods exports to large-scale employment-generating sectors (such as the textile industry, leather products, footwear, etc.).
- Services (like information technology, nursing etc.) are likely to boost exports.
- At present India is not included in the Regional Comprehensive Economic Agreement (RCEP). For this reason, FTA will strengthen India’s ability to negotiate trade agreements.
FTA is an arrangement between two countries or factions doing business with each other. Its purpose is to ensure satisfactory trade relations between the two countries or factions. For this, it reduces or eliminates customs tariffs or non-tariff barriers.
Source – The Hindu