The India-UK Free Trade Agreement (FTA) negotiations are “very close” to conclusion but three important areas, intellectual property rights (IRPs), bilateral investment treaty (BIT) and rules of origin (ROO), remain to be ironed out, sources have said.

“The eleventh round of India-UK FTA  negotiations held earlier this month in London went off well and as many as 19 out of 26 chapters of the FTA have been closed. We are very close to concluding the FTA, which may happen this year, but IPRs, BIT and ROO are yet to be finalised,” a person tracking the development told businessline.

The two countries are optimistic that the pact will benefit both sides and are hopeful that it will help double bilateral trade to $100 billion by 2030. The next negotiation round for the FTA is scheduled in August.

Although the difficult issues are just a handful, it may take considerable effort to sort them out.

In the area of IPR, India is unwilling to give in to demands from the UK on data exclusivity and patent term extension as it could affect production of cheap life-saving generics in the country. “India does not want to agree to any provision that could lead to extension of the patent life of a drug after the initial term has ended. It is a red-line for the negotiating team,” an official had earlier said.

Listen: What are the challenges in navigating the India-UK Free Trade Agreement negotiations?

‘Not in agreement’

The two counties are also not in agreement on several provisions of the BIT being negotiated, especially on dispute resolution, as India has been insisting on the clause of ‘exhaustion of local remedies’. This requires an investor to first submit its claim before the relevant domestic courts or administrative bodies and exhaust all judicial and administrative remedies for at least five years before initiating international arbitration proceedings. “Some exceptions can be made for particular FTA partners but the Department of Economic Affairs will need to take a final call on that,” the official added.

Also read: India-UK FTA: Efforts on to iron out contentious areas like IPR, digital trade, environment, labour

Seeking flexibility

The UK also wants flexibility in ROO criteria that determine the national source of a product and in turn whether it qualifies for concessions under a specific FTA as it believes that India’s proposed rules are tough. “India has agreed to go in for product specific rules for ROOs. It entails different rules for different products, be it value addition or change in tariff heading. But the level of transformation required is something that needs to be agreed to,” the source said.

Also read: India-UK FTA. UK drives a hard bargain with India for free market access

In the area of market access for automobiles and wines & spirits, which were sticking points for a long time as the UK was not satisfied with the tariff cuts being offered by India, there has been a broad agreement. “But one must remember that nothing is agreed to till everything is agreed to,” the source added.

India’s main exports to the UK comprise ready-made garments and textiles, gems and jewellery, engineering goods, petroleum products, transport equipment, spices, machinery and instruments, pharmaceuticals and marine products.

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