India’s Finance Minister Nirmala Sitharaman is set to visit London from April 8 to April 10 to discuss important trade and investment matters between India and the United Kingdom (UK). During her visit, she will take part in the India-UK Economic and Financial Dialogue (EFD), a platform designed to boost economic cooperation between the two countries.
One of the key meetings scheduled during her visit is with Rachel Reeves, the UK’s Chancellor of the Exchequer. Both leaders are expected to talk about:
- The Free Trade Agreement (FTA) negotiations
- The Bilateral Investment Treaty (BIT)
- Ways to increase trade and investment between India and the UK
A senior official has confirmed that these topics may come up in discussions, as both countries aim to strengthen their economic partnership through institutionalized dialogues like the Economic and Financial Dialogue (EFD).
India-UK Free Trade Agreement (FTA) Negotiations Resumed
India and the UK had put a pause on their trade agreement talks, but negotiations resumed in February 2024. This happened after India’s Commerce & Industry Minister Piyush Goyal met with his UK counterpart, Jonathan Reynolds, in New Delhi on February 24.
Goyal stated that India and the UK are actively working on:
- The Free Trade Agreement (FTA)
- The Bilateral Investment Treaty (BIT)
- The Double Contribution Convention Agreement
He emphasized that India is not in a hurry to finalize the agreement. “We will have speed but not haste,” he said, making it clear that India wants a well-negotiated deal rather than a rushed one.
The proposed India-UK Free Trade Agreement (FTA) includes 26 different chapters, covering topics like:
- Trade in goods and services
- Investments and financial regulations
- Intellectual property rights
While the UK wants lower import taxes on products like electric vehicles and Scotch whisky, India is pushing for easier visa rules for Indian professionals who want to work in the UK.
Why the India-UK Economic and Financial Dialogue (EFD) is Important
The India-UK EFD is a crucial platform that helps strengthen the financial and trade relationship between the two countries. The focus areas include:
- Sustainable development
- Financial reforms
- Regulatory frameworks
By improving these areas, both nations aim to increase trade and investment opportunities.
India-UK Trade and Investment Data
The trade and investment relationship between India and the UK has been growing rapidly. Here are some key statistics:
- India-UK bilateral trade in 2022-23 was £36.3 billion, which is 34.2% higher than the previous year.
- India’s exports to the UK were £21.6 billion, while imports from the UK were £14.7 billion.
- India was the UK’s 12th largest trading partner, accounting for 2.1% of the UK’s total trade.
India’s Investment in the UK
India is a major investor in the UK’s economy:
- In 2023-24, India invested in 108 projects, creating 7,533 new jobs.
- India is the second-largest source of Foreign Direct Investment (FDI) in the UK, after the United States.
UK’s Investment in India
The UK is also a significant investor in India:
- The UK is the 6th largest foreign investor in India, after Mauritius, Singapore, the USA, the Netherlands, and Japan.
- Between April 2000 and March 2024, the UK invested $35 billion in India, making up 5.17% of total FDI received by India.
What to Expect from Sitharaman’s London Visit
Sitharaman’s visit is expected to give fresh momentum to the ongoing trade negotiations. If progress is made, it could help finalize the Free Trade Agreement (FTA) and the Bilateral Investment Treaty (BIT), bringing new opportunities for businesses in both India and the UK.
With growing trade and investment between the two nations, the upcoming discussions in London will play a vital role in shaping the future of the India-UK economic partnership.
