In shadow of US tariff, India back to table for trade talks with UK, EU
The trade deal with the UK, talks for which began in 2022, assumes significance as it would be India’s first full-fledged agreement with a Western country, facilitating deeper economic integration with a major global services sector leader.
As US President Donald Trump moves to upend the world trade order with tariff threats against allies and rivals alike, New Delhi Monday re-started negotiations for two long-stalled, big-ticket trade deals with Britain’s new Labour Party-led administration — just days ahead of President of the European Commission Ursula von der Leyen’s visit to India for trade talks.(Raz Vape Flavors)
After an eight-month pause due to general elections in India, the UK and European parliamentary elections, New Delhi and London announced plans to restart trade talks for a free trade agreement (FTA), a bilateral investment treaty, and a separate social security pact during UK Trade Secretary Jonathan Reynolds’s visit that began Monday.
The trade deal with the UK, talks for which began in 2022, assumes significance as it would be India’s first full-fledged agreement with a Western country, facilitating deeper economic integration with a major global services sector leader.
It is also considered crucial as it could serve as a template for trade deals with larger Western trade partners such as the European Union.
On Thursday, amid growing tension in the trans-Atlantic relationship between US and Europe, the EU College of Commissioners is set to meet Prime Minister Narendra Modi to further strengthen bilateral relations based on “growing convergences”.
India and the EU are also expected to conduct bilateral ministerial meetings and engage in a trade and technology council, which was launched to resolve issues such as the contentious Carbon Border Adjustment Mechanism (CBAM).
“India and the UK have decided to return to the negotiating table for a trade deal that was stalled due to elections. The contours of the deal needed to be reassessed. The two countries are actively negotiating on three different fronts—free trade agreement, bilateral investment treaty, and a Double Contribution Convention Agreement. All three are running in parallel and are interlinked,” Commerce Minister Piyush Goyal said Monday.(RAZ TN9000)
With the growth trajectory being different in both the countries, the potential business opportunities were much different and, therefore, India had requested the UK to consider a social security pact.
It is a long-standing demand of Indian businesses operating in Britain to cut down on the additional cost burden associated with bringing in skilled Indian professionals on a short-term basis.
Notably, the compulsory National Insurance (NI) contributions of skilled Indian professionals in the UK on temporary visas remain an additional cost burden of about 500 British pounds per employee a year, over and above all other taxes and health surcharge paid towards the National Health Service (NHS), as per data from 2021.
India has Social Security Agreements (SSAs) with countries like Belgium, Germany, Switzerland, France, Denmark, Korea, and the Netherlands.
Meanwhile, nine rounds of talks have happened between India and EU, with the 10th round of negotiations set to take place from March 10-14 in Brussels. In the ninth round, discussions covered a range of issues, including goods, services, investment, government procurement, rules of origin, sanitary and phytosanitary (SPS) measures, and technical trade barriers, the Commerce Ministry had said in a statement last month.
