Why in News?

• India and the UK are very close to concluding negotiations for the proposed Free Trade Agreement (FTA) and discussions on 19 out of total 26 chapters have been closed.

Bilateral Relations

• India and the United Kingdom share a modern partnership bound by strong historical ties
• India’s multifaceted bilateral relationship with the UK intensified with its up-gradation to a Strategic Partnership in 2004
• A Joint Declaration titled ‘India-UK: towards a new and dynamic partnership’ which envisages annual Summits and regular meetings between Foreign Ministers
• Civil nuclear energy, space, defence, combating terrorism, economic ties, science & technology, education and culture are the areas of cooperative relations between India and UK
• The UK supports India’s proposal for permanent membership of the UNSC and is also an important interlocutor for India in the European Union (EU), Group of Eight (G-8), G20 and global contexts

Latest Developments in the India – UK Relations

India and the UK are in talks to build a pathbreaking partnership designed to boost cooperation in critical strategic technologies.

• The proposed partnership is expected to focus on semiconductors, telecommunications, critical minerals and other technologies with strategic implications.
• The focus will also be on linking Indian firmswith cutting-edge research facilities based in the UK focusing on 5G and other crucial technologies. 
  • Another key focus will be building pathways for greater mobility for research talent to move between the countries.
• The agreement will remove red tape standing in the way of major collaborations, while unleashing a raft of new joint research schemes aiming to deliver progress on some of the biggest issues facing the world, from climate change and pandemic preparedness to AI and machine learning. 
• The objective of this agreement is to enable quicker, deeper collaboration on science between the two countries, with the aim of helping economic growth, creating skilled jobs and improving lives in the UK, India, and worldwide.

Political Relation

• Politically, relations between India and the UK occur mostly through the multilateral organizations of which both are members, such as the Commonwealth of Nations, the World Trade Organization and the Asian Development Bank.
• After becoming the Prime Minister of the United Kingdom, Cameron was actively involved in enhancing the Indian-British relationship on various dimensions, such as business, energy security, climate change, education, research, security and defence, and international relations.

Economic Relations

• India is the third largest foreign investor in the UK.
• There are many bilateral trade agreements between the two nations designed to strengthen ties.
• The British government has chosen India as one of its most influential trade partners because it is one of the “fastest growing economies in the world.”
• The upcoming UK’s post-Brexit plan would be substantial scope for further strengthening bilateral cooperation across a range of sectors, including science & technology, finance, trade & investment, and defence & security between the two countries.
• Recently, India and the United Kingdom (UK) affirmed their shared commitment towards a Free Trade Agreement(FTA) during the 14^th virtual Joint Economic and Trade Committee (JETCO) meeting.

Joint Economic Trade Committee

• JETCOprovides a forum to United Kingdom companies to enhance their links and develop new partnerships with India business and decision-makers.
• Government to Government negotiations, which address issues of market liberalization and market access, are conducted through the JETCO process.
• The UK India Business Council playsa key role in feeding the views of the UK business community into the JETCO process with a view to achieving favourable outcomes for UK companies.
• One of the key objectives of the JETCO process is to unveil opportunities for UK’s most prominent institutional investors to invest in India.

Challenges Involved in India – UK Free Trade Agreement

• FTAs are arrangements between two or more countries or trading blocs that primarily agree to reduce or eliminate customs tariff and non-tariff barriers on substantial trade between them.
• Following are the major roadblocks impeding the signing of a FTA between India and the UK.
• Services & Investment –
  • The UK wants India to liberalize its highly protected services markets in telecommunications, finance, and legal services.
  • However, India remains apprehensive due to opposition at domestic level.
  • As both countries are large services exporters, a deal without considerable services liberalization may be a shallow FTA.
  • Significant complementarity between the services exports of both countries means the negative impact of liberalization on homegrown businesses would be reduced.
• Temporary Movement –
  • India is looking for simplification in the UK’s business and temporary visas for professionals.
  • Recently on the sidelines of the G20 summit in Indonesia, PMs Narendra Modi and Rishi Sunak agreed to a reciprocal Young Professional visa scheme that will offer a place to degree-educated young Indians the right to live and work in the UK (and vice-versa) for up to 2 years.
  • Building on this, additional easing in immigration rules could focus on the IT and healthcare sectors.
• Data Policies –
  • Data protection is a major concern for UK firms that may operate in India under the FTA due to the absence of GDPR like protection in India.
  • India should implement the Digital Personal Data Protection Bill 2023 that is pending in the Indian parliament. Recently, the Lok Sabha passed the Bill.
  • This will be an important step towards better data protection and meeting the UK business standards.
• IPR and Medicines –
  • The leaked intellectual property rights (IPR) chapter of the FTA calls for the harmonization of intellectual property (IP) regulations, especially patent laws in the UK and India.
  • Such relatively strict laws could affect the provision of affordable and life-saving generic medicines in India.
• Agriculture –
  • Agriculture is a sensitive sector in both countries.
  • The UK is a net agricultural importer and an FTA could boost India’s agricultural export share from just 1.1% in the UK’s import basket for goods like rice, marine products, spices and bovine meat.
  • India could revisit its apprehensions about allowing British food imports, especially with its expanding middle class that is willing to spend on higher-value added agri-based food products.
  • To compensate farmers for losses from increased British imports, India could establish a structural fund like those of the EU, and the UK could contribute aid-for-trade.

Way Forward

• UK values its relationship with India just more than trade and India regards UK as an important player in world politics and development. There is convergence of views on the global issues. Both believe in rule based international order. UK is the permanent member of the UNSC and supports India for its permanent membership. Both support for the development in west Asia.
• There are areas in which UK seeks India’s support, opinion and share their views with us. At a time when UK is not the part of Europe, it is very important to have strong friends outside and India is one of those.
• As the UK prepares to leave the EU, it is time to reset this relationship. Both the countries cannot afford to be complacent or rely on historical connections to deliver a modern partnership.
• Britain could further its relationship with India including through security and defence cooperation, joint exercises of the armed forces, and working with India to achieve reform at international bodies such as the UN and WTO. Trade, security, a shared commitment to the rules-based international system — these are all factors in our growing and evolving partnership.
• India is one of the fastest growing large economies of the world and FTA with the UK has played a significant role in enhancing the trade volume of the country.

FAQs based on the India – United Kingdom Bilateral Relationship

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India – United Kingdom Bilateral Relationship,India – United Kingdom Bilateral Relationship