●INDIA-UK Free Trade Agreement(FTA)
•In FTA, two trading partners eliminate or significantly reduce import duties on the maximum number of goods traded between them
•The meeting was held by India and UK to revive and revitalise the long standing trade and economic linkages between them.
•They agreed to an early harvest scheme or a limited trade agreement to lower tariffs on a small set of goods apart from easing rules for select services.
•They also resolved to cooperate in the health sector especially in the wake of Covid-19 pandemic.
[Previously, India and the UK were involved in discussing a preferential trading arrangement under the proposed India-European Union FTA.]
•The bilateral trade between the two countries stood at 15.5 billion USD in 2019-20 as against 16.87 USD billion in 2018-19.
•India has engagement with the UK in sectors like pharma, textiles, leather, industrial machinery, furniture, and toys.
•India is also looking to the UK to support it with technology based products such as high quality cameras, medical devices, and automobiles.
•The UK has been pushing India for a bilateral trading arrangement ever since it voted to leave the European Union (EU) in June 2016 and left finally in january 2020.
•However, India had been resisting these efforts as it decided that the Brexit process should complete first.
•India has been keen to understand how much of a “special and preferential” access the UK will get in the vast European market when it is out of the EU’s single-market dynamics.
•Hence, these talks would help in intensifying the beneficial aspect of the UK as a trading partner of India.
• India opted out of the Regional Comprehensive Economic Partnership deal in November 2019.
•Therefore, there is renewed focus on trade deals with the US, the European Union and the UK, which are key markets for Indian exporters and are keen to diversify their sourcing.
•The UK is a permanent member of the UN Security Council, and one of the strategic partners of India.
•Strengthening bonds with the trade would seek UKs support at global issues like standoff with China in the Ladakh sector of the Line of Actual Control (LAC) and claim for permanent seat at UNSC.
•Review of Trades: India could seek a review of trading agreements including renegotiating tariffs on some items along with the tightening of provisions governing country-of-origin certification.