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U.K. launches FTA negotiations with India:

GS Paper 2:

Topics Covered: Bilateral Relations.



The UK government on January 13, 2022, announced the launch of free trade agreement (FTA) negotiations with India.

  • This is being described as a “golden opportunity” to put British businesses at the “front of the queue” of the Indian economy.



  • It offers huge benefits for British businesses, workers and consumers.
  • Scotch whisky, financial services and cutting-edge renewable technology are among some of the key sectors set to benefit.


What is a FTA?

It is a pact between two or more nations to reduce barriers to imports and exports among them. Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.

  • The concept of free trade is the opposite of trade protectionism or economic isolationism.



The agreement may cover, among others, services, investment, and economic cooperation.

  • FTA normally covers trade in goods (such as agricultural or industrial products) or trade in services (such as banking, construction, trading etc.).
  • FTA can also cover other areas such as intellectual property rights (IPRs), investment, government procurement and competition policy, etc.



Current Affairs


Why does a trade deal with India matter for the UK?

By 2050, India will be the world’s third-largest economy with a middle class of almost 250 million shoppers.

  • The UK wants to unlock this huge new market for the great British producers and manufacturers across numerous industries from food and drinks to services and automotive.
  • It has the potential to boost bilateral trade by up to GBP 28 billion a year by 2035 and increase wages by up to GBP 3 billion across the UK.
  • A deal with India is also pegged as a “big step forward” in the UK’s post-Brexit strategy to refocus trade on the Indo-Pacific, home to half of the world’s population and 50 per cent of global economic growth.


Significance for India:

Removing duties alone would increase UK exports to India by up to GBP 6.8 billion, with Scotch whisky and cars currently facing enormous duties of 150 per cent and 125 percent respectively.


Current Affairs


Insta Curious:

Have you heard about Early harvest agreements? What are the benefits of such agreements? Reference: read this.

Sources: the Hindu.