India must be prepared to open its markets for goods and services much more for a successful conclusion of the India-UK Free Trade Agreement (FTA), sources in the UK government have said. 

“India’s tariffs on goods are very high. The UK believes that India has to do much more in terms of bringing them down and opening its markets. The UK already is very open,” a UK official said not wanting to be quoted.

While the UK has recently shown huge interest in expediting the proposed FTA, possibly wanting it concluded before the elections in both countries, sending the ball in India’s court could indicate the country’s limited flexibility on key issues. 

“The India-UK FTA can be sealed in as less as three weeks provided India opens up more. There are economic and political ambitions on both sides,” the official added.

The UK has been pressing for deep duty-cuts on items such as Scotch and automobiles, where import duties in India are as high as 150 per cent and 100 per cent (70 per cent for vehicles up to $40,000) respectively. It also wants liberalisation of financial and legal services and strong IPR rules to give additional protection to pharmaceutical majors.

New Delhi, however, holds the view that the UK’s tariffs on goods are low because of the attributes of the country’s economy as it benefits from the low-duty imports. “The UK must be ready to give additional benefits to India in the FTA such as lowering tariffs for certain items such as textiles where duties are high, liberalisation of non-immigrant visas and a social security totalisation agreement,” an Indian industry source said.

Recently, Commerce Secretary Sunil Barthwal told the media that the country must safeguard its interests and make substantial gains in the FTA negotiations with the UK.“India should commercially gain out of it (India-UK FTA) and we should also be able to safeguard the interest of our farmers, and (protect) goods covered under PLI (production linked incentive) scheme. So, we are there to see that the deal is a fair deal,” Commerce Secretary Sunil Barthwal said.

However, the UK does not seem too comfortable offering big concessions to Indian workers, whether in terms of liberalisation of work visas or a social security agreement. A social security agreement could help Indian professionals working temporarily in the UK save up to millions of pounds every year in compulsory contributions for pension that they would not be able to enjoy as their work tenure would end much earlier.

 The two countries are optimistic about bilateral trade in goods and services doubling to $100 billion by 2030 if the FTA is implemented soon.

Earlier this month, a UK trade delegation led by Douglas McNeill, chief economic advisor to UK PM Rishi Sunak, was in New Delhi, meeting top decision makers, including Finance Minister Nirmala Sitharaman, Commerce & Industry Minister Piyush Goyal and senor officials in the Prime Minister’s Office, looking for possible breakthrough in sticky issues.


*India-UK FTA negotiations launched on Jan 13 2022

*Potential to double trade to $100 billion by 2030

*14th round of negotiations began from Jan 10 2024

*Majority of 26 chapters closed but remaining issues tricky

*UK wants deeper duty cuts in goods, including Scotch, cars

*India keen on liberalisation of work visas, social security pact