Home   »   Types of Trade Agreements   »   India-UK Free Trade Agreement

India-UK Free Trade Agreement


India-UK Free Trade Agreement: Relevance

  • GS 2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.


India-UK Free Trade Agreement: Context


India-UK Free Trade Agreement: Key points

  • Both countries have agreed to avoid “sensitive issues” in the negotiations.
  • Through early harvest agreement, India aims to achieve up to 65 per cent of coverage for goods and up to 40 per cent coverage for services.
  • By the time the final agreement is inked, the coverage for goods is expected to go up to “90 plus percentage” of goods.
  • India is also negotiating a similar early harvest agreement with Australia, which is supposed to set the stage for Comprehensive Economic Cooperation Agreement.


India-UK Free Trade Agreement_3.1


What are early harvest trade agreements?

  • Early harvest agreements are such trade agreements that are used to initiate bilateral trade between two countries on a restricted list of goods and services.
  • It is primarily used as a frontrunner to clinching a more comprehensive FTA.


Early harvest trade pacts: Issues

  • Early harvest schemes potentially target the low-hanging fruits, leaving the tougher goods and services for later.
  • This strategy can lead to significant delays in signing up the broad-based FTAs, which could potentially lead to impediments.
  • Example: India had concluded an early harvest agreement with Thailand in 2004. However, we are yet to conclude a comprehensive FTA with the country.
    • Also, India has a trade agreement with Sri Lanka dealing with goods but was not able to conclude an agreement on services and investments.
  • Early harvest agreements that do not transform into full-scale FTAs are exposed to legal challenges from other countries that are members of the World Trade Organisation (WTO).
  • An early harvest deal may reduce the incentive for one side to work towards a full FTA.


India-UK Free Trade Agreement_4.1


India FTA status

  • India has in place 10 FTAs and six PTAs (preferential trade agreements).
  • Moreover, India is negotiating 16 new and expanding seven existing agreements, including with trading partners such as Canada, the EU, the US, alongside Australia and the UK.


Also Read:

The Editorial Analysis: Reaping India’s demographic dividend Analysis of Yojana Magazine-Infrastructure: History& Challenges Global Risks Report 2022 Makar Sankranti, Lohri, and Pongal 2022: Date, History, and Significance
Analysis of Sansad TV Discussion : Impact of Election Freebie Politics on Economy Wildlife sanctuaries in India Quarterly Employment Survey Swami Vivekananda
The Editorial Analysis: The sail that Indian diplomacy, statecraft need 24th National Conference on e-Governance 2021: Hyderabad Declaration Adopted RBI Sets Up a Fintech Department Jallikattu- T.N. govt. allows Jallikattu

Sharing is caring!

Leave a comment

Your email address will not be published. Required fields are marked *