Connect with us

Headlines of The Day

India, UK to hold next round of negotiations for FTA soon

India and the UK officials are expected to soon hold the next round of talks for the proposed free trade agreement (FTA) to iron out differences on issues such as social security pact, automobiles, medical devices, and movement of professionals, an official said.

The official said that the UK team may come here for the 14th round of negotiations so that the talks can be concluded at the earliest.

“Virtual sessions are progressing. But we are planning for a full fledged round of talks. In the full round, both sides discuss all the chapters. Some 60-70 sessions happen parallelly,” the official, who did not wish to be named, said.

Issues which need resolution include rules of origin; intellectual property rights (IPRs); social security agreement; duty concessions on electric vehicles, scotch whiskey, lamb meat, chocolates and certain confectionery items; and liberalisation of norms in services sectors like banking and insurance.

India wants a social security agreement (SSA) under the FTA. The agreement would ensure that employers are saved from making double social security contributions for the same set of employees (posted in other countries). Besides, the employees would also be saved from making double social security contributions.

India has such agreements with countries including Belgium, Germany, Switzerland, France, Denmark, Korea, the Netherlands, Hungary, Finland, Sweden, Czech Republic, Norway, Austria, Canada, Australia, Japan and Portugal.

Thus, Indians going abroad for employment are not required to contribute to social security schemes in these countries. They and their employers can continue with social security schemes run by the Employees’ Provident Fund Organisation (EPFO) here in India while serving abroad.

In July Union Labour and Employment Minister Bhupender Yadav has said that India is negotiating SSAs with the US and UK to avoid duplication of such schemes.

Talks are also progressing on the proposed bilateral investment treaty (BIT).

The investment treaty is being negotiated as a separate agreement between India and the UK. These investment treaties help in promoting and protecting investments in each other’s country. The main point of contention involved in this pact is about the mechanism for the settlement of disputes.

BITs help in promoting and protecting investments in each other’s countries. India has proposed to first utilise all local judicial remedies for settlement of disputes before initiating an international arbitration.

India and the UK launched the talks for free-trade agreement (FTA) in January 2022, with an aim to conclude talks by Diwali (October 24, 2022), but the deadline was missed due to political developments in the UK.

There are 26 chapters in the agreement, which include goods, services, investments and intellectual property rights.

The Indian industry is demanding greater access for its skilled professionals from sectors like IT, and healthcare in the UK market, besides market access for several goods at nil customs duties.

On the other hand, the UK is seeking a significant cut in import duties on goods such as scotch whiskey, automobiles, lamb meat, chocolates and certain confectionary items.

Britain is also looking for more opportunities for UK services in Indian markets in segments like telecommunications, legal and financial services (banking and insurance).

The bilateral trade between India and the UK increased to USD 20.36 billion in 2022-23 from USD 17.5 billion in 2021-22.

The ‘rules of origin’ provision prescribes minimal processing that should happen in the FTA country so that the final manufactured product may be called originating goods in that country.

Under this provision, a country that has inked an FTA with India cannot dump goods from some third country in the Indian market by just putting a label on it. It has to undertake a prescribed value addition in that product to export to India. Rules of origin norms help contain dumping of goods. PTI

Copyright © 2024 Medical Buyer

error: Content is protected !!