India-UK trade pact talks may take more time as certain issues remain unresolved: Sources

The India-UK negotiations for a free trade agreement (FTA) will continue for some more time as certain issues remain unresolved, officials said, even as commerce and industry minister Piyush Goyal visited London for the second time in the last one week to iron out the sticky issues.

There are four or five issues in the three pacts that the two countries are negotiating - FTA, a bilateral investment agreement (BIT) and a social security pact called the Double Contribution Convention Agreement. These include the UK's carbon border adjustment mechanism (CBAM) which is to be introduced on January 1, 2027, a sunset clause in the BIT and data localisation issues.

"Certain critical issues are still there. Some more meetings would be required," said an official. Goyal and UK secretary of state for business and trade Jonathan Reynolds last week reviewed the progress of the talks in London.

Goyal arrived in the UK Monday last week for two days where he met Reynolds to advance the FTA negotiations. On Tuesday he met chancellor of exchequer Rachel Reeves. Goyal concluded his two-day visit to London on April 29. He then visited Norway and Brussels before returning to London on May 2.

The two sides were preparing to announce the closure of these negotiations on April 29 in London, but it was delayed over differences which came up towards the end of the talks.

The FTA has 26 chapters that include goods, services, investments and intellectual property rights. At least 23 of these are concluded and more than 75% of the agreement is legally vetted.

India wants an exemption on the CBAM while Britain is keen on more opportunities for its services in India, such as telecommunications, legal, banking and insurance, and free cross-border data flows.

EU FTA
Goyal reviewed the progress of the India-EU FTA negotiations during his visit to Brussels. He met Belgian minister of defence and foreign trade to strengthen ties.