A number of non-tariff barriers, like rules related to investor protection, intellectual property rights, and harmonisation of governance and standards, are among the key sticky points in the Free Trade Agreement (FTA) that India and the United Kingdom target to sign by Diwali this year.
"The UK businesses, as well as the Indian businesses, want the equal focus to be given to non-tariff barriers, particularly the technical barriers to trade and investment," Richard Heald, Executive Chair, UK India Business Council (UKIBC), told ANI in an interview.
He said there are a number of non-tariff barriers that both countries need to address in order to have a comprehensive trade deal. "It's not only about tariff barriers but also non-tariff barriers," he said.
He said the non-tariff barriers that the two countries need to address include the issues around rules of origin, harmonisation of governance and standards, confirmation of rules around intellectual property rights, and investor protection.
Heald, who served as chief executive officer of UKIBC from 2010 to 2020, said addressing the non-tariff barriers would "give the free trade agreement absolute credibility as far as the businesses are concerned, both in the UK and India." India and the UK announced their intention to have a comprehensive free trade agreement during a virtual summit held in May 2021 between Prime Minister Narendra Modi and his British counterpart Boris Johnson. Formal negotiations on the proposed FTA between the two countries started early this year.
The third round of talk was held on May 6 in a hybrid mode with some of the teams meeting in New Delhi and the majority joining virtually.
During the third round of negotiations, "draft treaty text was advanced across the majority of chapters. Technical experts from both sides came together for discussions in 60 separate sessions covering 23 policy areas," as per a joint statement released after the meeting.
India's Commerce and Industry Minister Piyush Goyal visited London in the last week of May to take the negotiations forward. After the meetings with UK negotiators, Goyal had expressed hope that the FTA would be signed by Diwali.
The fourth round of negotiations is due to be hosted by the UK this month.
During a summit meeting held in April 2022, prime ministers of India and the United Kingdom set the timeline of Diwali 2022 (October 24) for formalisation of the FTA.
On the expectation of meeting the Diwali deadline, Heald said the leadership of the two countries has shown a strong political will to meet the deadline.
"A substantial progress has been made. Indian negotiating team and UK negotiating team have been meeting every five weeks or so for the discussion," he said expressing hope that the FTA deal between the two countries would be signed by the end of this year.
He said the FTA would be designed to ease and facilitate not only the existing activities but also look at the areas and issues that would appear in the future.
Heald said the UK India Business Council has been pitching for the removal of tariffs as well as non-tariff barriers between the two countries. The UK India Business Council is the sole accredited UK Government Overseas Business Network Initiative provider for India.
Asked about the impact of the Russia-Ukraine conflict on the FTA negotiations, Heald said, "I don't think that will affect the actual content of the FTA. However, it might affect the time." On the proposed FTA negotiations between India and the European Union (EU), Heald said it would be more complicated as India would be required to deal with 28 countries, which are members of the EU.
"Here you are dealing bilaterally between UK and India. When you are dealing with the EU, you have to deal with 28 countries. I am not saying that the priority is being given to the EU or the UK, all I am saying is that, in practice, a bilateral agreement is easier than dealing with a multiplicity of opinions of nation," he said.
India is scheduled to restart FTA negotiations with the EU on June 17 in Brussels. Commerce and Industry Minister Piyush Goyal is scheduled to lead the Indian side at the negotiations.
India and the EU held 16 rounds of talks between 2007 and 2013. The talks have been stalled for the last nine years on several issues related to tariff and non-tariff barriers.