India-UK Trade Pact: Deal Postponed to After UK Elections

New Delhi, Jun 14 (PTI) The outstanding issues with regard to the proposed free trade agreement (FTA) between India and the UK will be taken up after the general elections in Britain, a senior government official said on Friday.

The issues which need to be ironed out include duties in sectors like electric vehicles, alcoholic beverages, and services.

"The outstanding issues to seal the deal will be resolved once the general elections in the UK are over," Additional Secretary in the Department of Commerce L Satya Srinivas told reporters here.

The UK's general election will be held on July 4.

India and the UK launched talks for an FTA in January 2022 to boost economic ties between the two nations.

There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights.

The bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from 20.36 billion in 2022-23.

On the India-EU trade pact, Srinivas said that the eighth round of talks is scheduled from June 24-28 in Brussels.

Another official said there is a willingness from the EU side to look at India's perspective in a much more favourable manner now.

"They understood some of our issues from a much better perspective," he said, adding that the attitude of other countries to look at China-plus story is also visible when "we are dealing with these countries for FTAs," the official added.

India and the EU officials also held talks on the carbon tax.

The CBAM or carbon tax (a kind of import duty) will come into effect from January 1, 2026, but domestic companies from seven carbon-intensive sectors, including steel, cement, fertiliser, aluminium and hydrocarbon products, would have to share data with regard to carbon emissions with the EU from October 1, 2023.

The official said that companies have started reporting the data.

"With the EU, we are discussing different areas where we need to work out mechanisms under CBAM. We have also set up a carbon platform so carbon pricing per se what will be the basis...what are the other measures in introducing carbon content, how do they account for accreditation or benefits to MSMEs," he said.

On the proposed free trade agreement with Oman, the official said that talks are progressing on remaining issues and it is moving towards conclusion.

"Oman also has some issues, we also have some reservations on the petrochemicals sector. Indian firms are also doing capacity building in that and we are discussing that," the official said.
Oman is seeking duty concessions on petrochemicals products such as polypropylene and polyethylene, used primarily in the plastics industry.

At present the customs duties on these products are around 7.5 per cent.

Oman is the third largest export destination among the Gulf Cooperation Council (GCC) countries.