After years of negotiation, the UK and India have reportedly agreed on 90% of the terms in their ambitious Free Trade Agreement (FTA). Businesses were informed this week that the remaining points of contention are limited, with hopes running high that the landmark deal will be sealed by the end of 2024.
Mobility Issues Nearly Resolved
A major breakthrough came as the complex issue of mobility—primarily visa arrangements for Indian professionals—was “largely resolved,” according to government sources. This issue had long been a sticking point, but with both sides showing political will, significant progress has been made. The deal now represents the closest the two nations have come to finalizing the agreement since talks began in January 2022.
Key Sticking Points: Whisky, Cars, and Pharma
Though 90% of the deal is in place, negotiations continue around key export sectors like whisky, cars, and pharmaceuticals. The UK hopes for significant tariff reductions on exports such as Scotch whisky and cars, sectors hit hard by U.S. tariffs. These reductions could open India’s booming market of 1.4 billion people to more British products, boosting UK exports and supporting industries back home.
Investment Treaty in Parallel Talks
Alongside the FTA, discussions are ongoing around a Bilateral Investment Treaty aimed at providing legal protection for investors. This is especially critical for the UK’s financial services sector, which views India as a key growth market. During a recent visit, Indian Finance Minister Nirmala Sitharaman held talks with UK counterparts, resulting in £128 million worth of new export deals and investments.
Environmental Concerns and CBAM
India has also pushed for an exemption from the UK’s upcoming Carbon Border Adjustment Mechanism (CBAM)—a tax on carbon-intensive imports. While India argues its status as a developing country, such an exemption could be controversial as the CBAM is designed to protect UK industries like steel from cheaper, more polluting imports.
A Brexit Prize Within Reach
The UK has been pursuing a trade deal with India since Brexit, considering it one of its biggest economic prizes. With political will strong on both sides and only a few issues remaining, the long-delayed FTA may finally be on the horizon—marking a new era of economic collaboration between two dynamic global players.
