India-UK FTA talks: Mobility, rules of origin, bilateral investment treaty, and whiskey form a cocktail of pending issues

India-UK bilateral trade has increased from $17.5 billion in 2021-22 to $20.36 billion in 2022-23.

Launched on January 13, 2022, the India-UK FTA has witnessed 12 rounds of negotiations being completed by August 2023. The negotiations cover 26 policy areas/chapters, out of which 19 chapters have been substantially closed and significant progress has been observed in the other chapters as per India's Commerce Ministry.

Last month, UK's Trade Secretary Kemi Badenoch during her visit to India reviewed the progress of the negotiations as well as held bilateral meetings with India's Finance Minister Nirmala Sitharaman and Commerce and Industry Minister Piyush Goyal.

On July 28, government sources indicated that a broad consensus had been reached on tariffs for automobiles and whiskey. Both nations are targeting growth in GDP, trade and employment, and the modalities for rules of origin are being worked upon, with agreement on broad principles already in place.

Speaking anonymously, a government official had said that discussions were underway for product-specific rules, even as India had also requested a long period of staggered duty reduction. Scotch whiskey remains yet another pending issue of trade India and the UK have resumed negotiations on a free trade agreement (FTA) with hopes of reaching a consensus between both countries. Scotch whiskey associations had told CNBC-TV18 that 219 million bottles were exported to India in 2022 despite an import duty of 150 percent.

While the UK is pushing for a duty cut, Indian whiskey manufacturers are opposing any such move in order to protect their market share. Earlier this year, India had replaced France as the world's biggest buyer of scotch, and India's whiskey market is expected to cross $22 billion by 2027.