India and the UK are seeking equal treatment in each other's market for their respective companies engaged in the services sector under the proposed free trade agreement, which is under negotiations, a government official said.
The two countries are looking at promoting trade in services through this agreement, negotiations for which was launched on January 13, 2021.
As many as ten rounds of talks have been completed till June this year and both sides are aiming to conclude the negotiations at the earliest.
In the services sector, the official said the UK is showing keen interest in areas such as financial sectors, while India is looking at areas such as education and movement of skilled professionals.
Under the services chapter of the free trade agreement, there are no customs duty concessions given to each other.
The two trading partners negotiate issues like giving national treatment to Indian and British companies in different sectors and ease norms to promote trade in services like simple visa processes for skilled labour force and easy foreign direct investment norms in the sector.
"Regular meetings are held at higher levels to review the progress, resolve the outstanding issues and discuss the way forward in negotiations. So far nothing has firmed up in the services sector," the official, who did not wish to be identified, said.
"The UK is an important financial services centre of the world, so they always have interest in that, the official added. Both sides have exchanged the list of services where they are keen to promote exports.
The negotiations between the two countries for the agreement covers as many as 26 policy areas/ chapters. Out of this, 14 chapters have been substantially closed for negotiations and there is significant progress in other areas.
Investment is being negotiated as a separate agreement (bilateral investment treaty) between India and the UK and it would be concluded simultaneously with the free trade agreement.
Indian students have for the first time overtaken Chinese as the largest group of foreign students studying in the UK with a massive 273 per cent hike in visas granted over the past few years, according to the country's official immigration statistics released in November last year.
The UK Home Office data collated by the Office for National Statistics (ONS) had shown that Indians also continue to be the top nationality granted visas in the skilled worker category, with 56,042 granted work visas in the past year.
Indian nationals also represented the highest number of visas at 36 per cent of the total under the tailored Skilled Worker Health and Care visa targeted at medical professionals, reinforcing Indian contribution to the state-funded National Health Service (NHS).
The UK ranks number two in the world in terms of tourists visiting India, but most of the tourists are British nationals of Indian origin. Around 500,000 Indians visit the UK every year.
Services Export promotion Council of India (SEPC) Chairman Sunil Talati said huge potential is there to further boost trade in services.
"The four areas of our interest in the UK under the trade agreement are accounting and auditing, legal, tourism, and engineering and architecture.
"We are requesting the commerce ministry to seek liberalised visa norms for Indian professionals in these segments. Medical treatment in the UK is expensive. In fact people from Scotland and Ireland also prefer India for treatment," Talati said.
He added that Uk is keen in segments such as legal, accounting and auditing, tourism, and financial services.
The bilateral trade between the countries has increased to USD 20.36 billion in 2022-23, as compared to USD 17.5 billion in 2021-22.
India's exports to the UK stood at USD 11.4 billion last fiscal, as against USD 10.5 billion in 20210-22. Imports aggregated at USD 8.96 billion in 2022-23, as compared to USD 7 billion in the previous fiscal.
India's main exports to the UK are ready-made garments and textiles, gems and jewellery, engineering goods, petroleum and petrochemical products, transport equipment, spices, machinery and instruments, pharmaceuticals and marine products.
The main imports include precious and semi-precious stones, ores and metal scraps, engineering goods, professional instruments other than electronics, chemicals and machinery.
In the services sector, the UK is the largest market in Europe for Indian IT services.
In the field of investment, the UK is one of the top investors in India. In 2022-23, India has received USD 1.74 billion foreign direct investment from Britain as against USD one billion in 2021-22. During April 2000 and march 2023, the investments stood at USD 33,9 billion.
Top sectors attracting FDI from the UK are petroleum, ports, services, roads and highways, computer software. There are around 700 Indian companies like the Tata Group in the UK.
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