Liquor tariffs on the table as new round of UK FTA talks begins

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BENGALURU/NEW DELHI : The third round of India-UK Free Trade Agreement talks begins in New Delhi on Monday with a focus on addressing key issues including demands that India cut tariffs on alcoholic beverages and processed foods, and for the UK to allow more Indian professionals to live and work in that country.

Both parties aim to complete the deal by October.

According to officials familiar with the discussions.

During his two-day visit to India last week, British Prime Minister Boris Johnson said the deal could double bilateral trade between India and the UK to around $100 billion by 2030. % of services, goods coverage to reach 90% in full agreement.

Consensus was also reached on mutual recognition of higher education qualifications, said another person familiar with the development. In the two rounds of trade talks which started in January this year, India and the UK managed to close four of the 26 chapters of the FTA.

Questions to the Department of Trade and Industry and the British High Commission in New Delhi remained unanswered until press time.

“India is looking to gain better access for its service sector professionals in the UK. India has ambitions under the movement of natural persons. We are looking for the movement of professionals such as nurses and other professions for service delivery,” the official said.

Johnson has previously expressed support for more visas for qualified Indians, saying the UK currently faces a shortage of experts in the IT and programming sectors.

“The UK is a service-oriented economy, and India is also very interested in services. The two countries have already discussed…nurses, seafarers…recognition in the certificate of competency, so once an eligibility criteria is aligned, they can go to work temporarily,” the official added.

Arpita Mukherjee, economist at think tank ICRIER, said sectors such as alcoholic beverages, dairy, processed foods, fisheries, meat, livestock genetics and animal feed and nutrition are likely to be discussed. under non-agricultural market access, engineering goods, aerospace components, automobiles and auto parts are areas of interest for the UK.

“The FTA should include a provision to reduce tariffs on bulk imports and intermediate goods to support manufacturing in India and value addition in India. In services, the discussion should go beyond Mode 4 to remove other barriers to trade, especially those related to Modes 1 and 2,” Mukherjee said. Mode 4 refers to the presence of a citizen of one country in the territory of another.

People familiar with the development said visas are a sensitive issue for the UK, as Brexit has shown.

“Brexit was based on the issue of immigration. They had bad experiences. The UK has developed a points-based visa system to attract talent. This aspect of the visa is certainly open,” said another person familiar with the development. Explaining the role of Brexit on the India-UK FTA, another official said that new opportunities have arisen after Brexit.

“There were a lot of complementarities in the two economies. But the UK was not an independent member and so there was a lot of untapped potential for a trade deal. For example, the UK is one of the biggest investors in India. Many students choose the UK for higher education. A huge Indian diaspora is present,” the official added.

The India-UK Free Trade Agreement is expected to give a boost to the domestic textile sectors. Exporters said the UK was one of the most important markets for them. India was at a disadvantage as it had lost duty-free access in several countries and faced fierce competition from Bangladesh, Sri Lanka and Cambodia.

A tricky issue in the third round of talks is expected to be the demand for a 150% Indian tariff cut on Scotch whisky.

“The UK requires a three-year maturation for whiskeys. We don’t ripen that much because of the warmer climate. They should create a different category called Indian whiskey, which is not ‘aged’ for technical reasons,” said Vinod Giri, chief executive of the Confederation of Indian Liquor Companies.

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