FTA negotiations with the European Union and Bangladesh also are progressing, but may take some more time for getting finalised
Chennai: India is likely to close Foreign Trade Agreements with the UAE, UK and Australia this year. Apart from merchandise trade, the country will seek more opportunities in the services sector while attracting foreign direct investments.
"We are in advanced stages of negotiation with the UAE, Australia and the UK. The government is engaging with the industry and different ministries and is keen on finalising the deal very quickly, most probably this fiscal," said Ajay Sahai, director general and CEO of the Federation of Indian Export Organisations. FTA negotiations with the European Union and Bangladesh also are progressing, but may take some more time for getting finalised.
Among the various issues that are being discussed by both sides, a major area of negotiation is on tariffs on goods trade. India's tariffs on goods are comparatively higher than the competitive countries. The countries are looking for more concessions on the tariff front.
"India may have to concede some of the tariff demands for higher concessions in the services sector. We are pushing services trade as well," he said. When it comes to services trade, India wants free movement of professionals and relaxed visa rules. Information technology, professional services and financial services might benefit if concessions are agreed upon.
In the UK's case, there is a large opportunity for India in services trade. As per the agreements between the UK and the European Union, there would be minimal or nil customs tariffs for merchandise tariffs. But there is no such agreement in the services sector. The movement of professionals will be as challenging for the EU as it is for India. India has an added advantage as it has a large English-speaking workforce and it is part of the commonwealth countries. Bilateral trade between India and the UK has been over $10 billion per year for the past 10 years and in 2020 it stood at $12.48 billion,
"Data security is an issue being deliberated with the UK. Further, there are concerns regarding environment and labour issues," he said.
The United Arab Emirates provides a huge opportunity to attract investments, especially from the sovereign funds. These will benefit the production linked investment (PLI) schemes announced for different sectors. An agreement will give UAE investors increased access to growing Indian markets.