Context: Recently, India has launched the Free Trade Agreement negotiations with the United Kingdom.
About

• The FTA is expected to facilitate the target of doubling bilateral trade between India and the United Kingdom by 2030, set by the Prime Ministers of both the nations in May 2021.

Observing that UK was a major trade partner of India with substantial bilateral volume of trade in goods and services, the cooperation was extended across areas like:

• tourism, 
• technology, 
• startups, 
• education, 
• climate change, etc.

The two nations were looking forward to a mutually beneficial trade deal with balanced concessions and market access packages in a wide range of sectors.

• It was also agreed to explore during the FTA negotiations, the possibility of an Interim Agreement to provide quick gains for benefiting businesses in both nations. The focus is to deliver a comprehensive, balanced, fair and equitable FTA, to benefit small, medium and micro-enterprises in both nations.

Significance

Democracy and diaspora: Both India and the UK are vibrant democracies, with a partnership built on shared history and rich culture. 

• The diverse Indian diaspora in the UK, who act as a “Living Bridge”, adds further dynamism to the relations between the two countries.

Better productivity: The FTA with the UK is expected to provide certainty, predictability and transparency and will create a more liberal, facilitative and competitive services regime.

Export: FTA negotiations with the UK are expected to increase our exports in Leather, Textile, Jewellery and processed Agri products. 

• India is also expected to register a quantum jump in the export of Marine Products through the recognition of 56 marine units of India.

Market access: The Mutual Recognition Agreements (MRAs) on Pharma could provide additional market access. 

• Service Sector: There is also great potential for increasing exports in service sectors like IT/ITES, Nursing, education, healthcare, including AYUSH and audio-visual services. India would also be seeking special arrangements for movement of its people
• Employment: The Agreement would help generate direct and indirect employment in both nations.
• Value Chains: The FTA will also contribute in integrating value chains and help augment the mutual efforts to strengthen the resilience of supply chains.