(MENAFN) Indian Prime Minister Narendra Modi and United Kingdom Prime Minister Rishi Sunak engaged in discussions on Tuesday regarding the long-awaited Free Trade Agreement (FTA) between their countries. Despite their agreement to pursue a mutually beneficial trade deal, reports indicate that negotiations have hit an impasse, with both sides struggling to find common ground.
In a statement shared on X (formerly Twitter), Prime Minister Modi described the conversation with Sunak as productive, highlighting their shared commitment to achieving a trade agreement that benefits both nations. Similarly, Sunak's office emphasized the importance of reaching an ambitious outcome on goods and services that fosters mutual prosperity.
The FTA has been under negotiation since 2001 but has faced significant hurdles, particularly as the United Kingdom seeks more favorable terms, including tariff reductions on goods exported to India. However, Indian companies are hesitant to grant import-duty concessions without assurances from the United Kingdom regarding the facilitation of temporary movement for Indian professionals.
Currently, Indian exports to the United Kingdom enjoy minimal tariffs, while British exports to India face significantly higher average tariffs, reaching approximately 14 percent. The United Kingdom is pushing for reductions in tariffs on high-tariff goods like automobiles (100 percent) and whiskey (150 percent), as well as seeking liberalization in financial and legal services and stronger Intellectual Property Rights (IPR) regulations to safeguard pharmaceutical interests.
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