India, UK to be ambitious on services in FTA

India and the United Kingdom on Thursday expressed their commitment to work out a free trade agreement (FTA) and said the two countries would be ambitious while negotiating on the services sector in the deal.

“We agree to be ambitious when considering services in the forthcoming FTA negotiations,” said a joint statement by Union Finance Minister Nirmala Sitharaman and her British counterpart Rishi Sunak. Pointing out that services account for 71 per cent of UK’S gross domestic product (GDP) and 54 per cent of India’s, the statement released after the India-uk Economic and Financial Dialogue said both countries recognise the importance of services to their respective economies.

Meanwhile, the UK welcomed India’s moves to junk retrospective income taxation and raise the cap on foreign direct investment in the insurance sector from 49 per cent to 74 per cent, besides removing the ownership and control requirements in the sector. Vodafone embroiled in a retrospective taxation dispute with India, is a Uk-based firm.

The UK requested Sitharaman for changes in the offer for participation for the reinsurance regulation so that all onshore reinsurers are given equal preference for participation in reinsurance placements. On privatisation, the joint statement said the UK will work with Department of Investment and Public Asset Management to share its experience through a series of workshops.