Prime Minister Narendra Modi; UK Prime Minister Rishi Sunak and his wife Akshata Murty arrive at Delhi Airport for the G20 meeting | Image: X/PTI
Prime Minister Narendra Modi extended a warm welcome to United Kingdom Prime Minister Rishi Sunak as he arrived in New Delhi for the G20 summit. PM Modi, took to platform X (formerly Twitter) to write, "Welcome @RishiSunak! Looking forward to a fruitful Summit where we can work together for a better planet."
— Narendra Modi (@narendramodi) September 8, 2023
In an exclusive interview with PTI on Thursday, Prime Minister Rishi Sunak expressed his optimism regarding the India-UK free trade agreement (FTA). He revealed his hope that the agreement, which is currently under negotiation, would be finalised by the end of the year. Sunak emphasised that this modern and forward-looking trade agreement could potentially double UK-India trade by 2030. He enthusiastically highlighted the opportunity for India to access the UK market, especially for its 48 million small and medium enterprises.
Sunak expressed excitement about expanding the trade relationship, underlining that the UK was the first European country to engage in negotiations for a free trade deal with India. He stressed the shared goal of reducing tariffs and cutting through red tape, thereby facilitating easier access to UK goods for Indian consumers and businesses. Despite the complexities of the ongoing negotiations, encompassing goods, services, and investments, Sunak remained steadfast in his confidence that a mutually beneficial agreement would be achieved.
During a Cabinet meeting in London on September 5, the UK PM provided a reassuring update on the FTA negotiations with India. He stated, "The free trade agreement (FTA) talks with India are progressing, and Britain will only agree to a pact that works for the whole of the United Kingdom." This statement underscores the UK's commitment to ensuring that any agreement struck serves the interests of all its regions and citizens.
The UK PM also emphasised the critical importance of India in the UK's global partnerships, describing India as an "indispensable partner" across all spheres of bilateral cooperation. He expressed his eagerness to further strengthen these ties, solidifying the special relationship between the two nations.
The journey towards the India-UK Free Trade Agreement began in 2022 when formal negotiations were launched. Prior to this, both nations had contemplated an interim free trade area aimed at reducing tariffs on most items. An "early harvest scheme" was agreed upon, which would involve lowering tariffs on a select set of goods and easing rules for specific services.
Both sides have consciously avoided addressing "sensitive issues" and have focused on areas of greater complementarity. Notably, agriculture and dairy sectors have been considered sensitive for India in these trade talks. Additionally, both countries have set an ambitious target of doubling trade between India and the United Kingdom by 2030.
A Free Trade Agreement (FTA) is a formal agreement between two or more nations aimed at reducing barriers to imports and exports. Under such agreements, goods and services can be freely exchanged across international borders with minimal government tariffs, quotas, subsidies, or prohibitions. FTAs stand in stark contrast to trade protectionism or economic isolationism and can take various forms, including Preferential Trade Agreements, Comprehensive Economic Cooperation Agreements, and Comprehensive Economic Partnership Agreements (CEPAs).
As the India-UK FTA negotiations advance with optimism and determination, leaders from both nations are looking to forge a transformative trade agreement that holds significant promise for their economies and bilateral relations, will the G20 summit be the platform where we have a solid agreement?