New Delhi, Nov 11 (KNN) India and UK are set to miss the signing of the free trade agreement (FTA), originally slated for Diwali last year, reported Indian Express. 

Both the countries re still working on contentious issues including chapters pertaining to rules of origin and intellectual property rights (IPR).

With talks gathering momentum (21 out of 26 chapters have been finalised and negotiations are happening in weekly rounds), there is urgency to wrap up the deal. 

India heads for elections early next year. General elections in the UK, meanwhile, will take place latest by January 2025.

A government official said India has been able to secure “limited” short-term work permits for its service sector workforce under the movement of natural persons (mode 4) category, reported Indian Express. 

Mode 4 refers to services traded by individuals of one WTO member through their presence in the territory of another. It covers employees of services firms and self-employed service suppliers.

The degree of mode 4 market access is “very limited” as it deals with commitments that provide a right of entry and stay only to highly skilled individuals and those transferred from an affiliate of a company with a commercial presence in the UK. 

The discussion on rules of origin, which ensure that products from third countries do not receive FTA benefits unless they undergo “significant transformation” in the exporting country, has been one of the most contentious.

After the US, the UK is the largest importer of India’s services. It makes up 17 per cent of India’s total services exports including travel, transportation, insurance, software and financial services. 

Services are among India’s fastest growing exports, registering a jump of nearly 30% to USD 267.79 billion from April to January in FY23 compared to USD 206.27 billion during the comparable period in FY22.

“(The) rules of origin (issue) is a crucial concern for India in various categories of products. For instance, there is fear that products from Europe, especially alcoholic drinks such as gin, vodka and Irish whiskey, could make their way into India via the UK. They are dominant in these areas so discussions regarding the same are going on in great detail,” said a person aware of the negotiations.

(KNN Bureau)