Just extra five inches & you grab the India-UK free trade agreement deal: NITI Aayog CEO

The India-UK Free Trade Agreement (FTA) negotiation is in the final stage with both sides very close to clinching an agreement, NITI Aayog CEO B V R Subrahmanyam said.

“I think this is a deal that is in the last slab,” Subrahmanyam said, adding: “The two sides I would say are not even at hand-shaking distance, the fingers are touching. It’s just a question of that extra five inches and you can grab the deal."  

The statement was made by the NITI Aayog CEO during his address at a panel discussion on the future of India-UK trade.

The FTA negotiation between India and the UK began in January 2022 under the then Conservative Party government and 13 rounds of negotiations were done. It was stalled due to the general elections in both India and the UK.  

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The agreement is aimed at significantly enhancing the GBP 38.1 billion a year. In July end this year, the process of FTA negotiation with India re-started by the UK’s newly elected Labour government led by Keir Starmer.

At the time of signing the new UK-India Infrastructure Financing Bridge (UKIIFB) agreement, both sides were keen to emphasise that the bilateral partnership is not being held “hostage” to the FTA even as the newly elected governments on both sides remain committed to it.

On Wednesday, the UKIIFB was signed between NITI Aayog and City of London Corporation in London. It aims at facilitating international investments into India’s ambitious infrastructure projects and is seen as a sign of the economic partnership moving at pace unencumbered by the FTA talks.

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“The relationship between two countries should not be hostage to a trade deal… India-UK partnership has many, many dimensions to it - infrastructure finance, climate, technology… FTAs enable a sense of familiarity to get things accelerated, in addition to massive opportunities, not only in goods but in services on both sides. It’s a perfect fit, perfect match,” Subrahmanyam said.

‘We are close’

Vikram Doraiswamy, the High Commissioner of India to the UK, who was also at the UKIIFB signing event said, “I’m not betraying any negotiating secrets when I tell you, we believe we are close. But, of course, the proof of the pudding is not just in the eating, but in ensuring that it comes out of the oven at the right time. So, we are in the process of sort of getting the last bits in place and those are always the hard yards."  

“But the FTA, in totality, is a very important part but (only) one part of the larger strategic relationship we seek to have the UK… that includes opportunities such as this UKIIFB to look at the financial services sector and essentially create a long-term viable channel for capital to be deployed profitably in India for the benefit of both economies; to look at technology; to look at research and innovation,” he further said.