India, July 26 -- India and the United Kingdom (UK) have signed a historic free trade agreement (FTA). Coming on the heels of India's other key FTAs with Australia and the UAE, the India-UK FTA promises to give a significant boost to the existing bilateral trade of $56 billion between the two countries. Spanning 30 chapters and comprehensively covering a wide range of issues, from trade in goods and services to labour, environment, and gender, the FTA is a new deal for businesses and people in India and the UK. India's labour-intensive sectors, such as textiles, leather, gems, and jewellery, are going to be significant beneficiaries of this FTA, as the UK will eliminate its tariff rates on these products. India, on its part, will lower tariff rates for passenger automobiles and other goods that are of interest to Britain. For instance, as per India's Schedule of Tariff Commitments, the tariff rates on passenger automobile vehicles will be reduced to 11%. However, this reduction has been placed in the staging category E10, which means that the tariff rate shall be reduced in ten equal annual installments. Thus, India has negotiated a more extended transition period, which will allow Indian industry ample time to prepare for the competition it will face from British cars. Moreover, the Indian automobile industry - a key success story of India's economic liberalisation - is robust and competitive enough to ward off import competition. Thus, the fear that the Indian automobile industry will suffer, as some have opined, due to the India-UK FTA, is exaggerated. A key area covered by the India-UK FTA is government procurement. India has opened its government procurement market to British bidders, marking a significant shift in Indian policy, which has historically restricted foreign competition in this area. However, India has also protected its national interests by ensuring that the provisions related to government procurement do not apply to procurements made for national security purposes, to preferences established under public procurement policies for micro and small enterprises (MSEs), and to the procurement of agricultural products made to support agricultural programmes. Additionally, Articles 15.4(8) and 15.4(9) reference the Make in India (MII) programme. Article 15.4(9) explicitly allows India to adjust its MII programme as per national needs, while still adhering to the overall requirement of non-discrimination. The environment chapter is another vital part of the India-UK FTA. Naysayers had held that the inability of the two sides to see eye to eye on the so-called carbon tax issue - the UK's Carbon Border Adjustment Mechanism (CBAM), which would impose a tax on India's carbon-intensive products, such as steel, aluminium, and cement - could derail the FTA. This did not happen. There is no mention of a carbon tax in the environment chapter. While concerns regarding the UK's CBAM, which is set to come into force in 2027, and its potential to encumber India's market access are genuine, Article 21.3(5) may save the day for New Delhi. This article states that domestic environmental laws should not be imposed in a manner that constitutes arbitrary or unjustifiable discrimination or results in a disguised restriction of international trade. India can utilise this provision to ensure that the UK does not use the CBAM or any environmental law for protectionist reasons. The chapter on labour illustrates India's ongoing shift away from its traditional stance of not linking trade to labour issues. A major concern among those who oppose this trade-labour connection is the fear that developed countries might exploit labour standards as a means of trade protectionism. To address this concern, Article 20.2(3) of the India-UK FTA clearly states that labour standards should not be utilised for protectionist purposes. Furthermore, Article 20.3 explicitly acknowledges the right of countries to develop their labour laws according to their own priorities, thereby providing India with sufficient policy space. As part of the chapter on services and movement of natural persons, India is also expected to benefit from a more liberalised trade in services regime. This would facilitate the movement of Indian professionals to work in the UK. A significant part of the India-UK FTA is Chapter 29, covering dispute settlement. This chapter is important because it demonstrates the continued reliance of India and the UK on the judicialisation of their international economic relations, i.e., a proclivity to use judicial mechanisms rather than diplomacy to settle their trade disputes. The dispute settlement chapter allows the two sides a choice of forum to bring a dispute. Article 29.5 explicitly states that if a dispute arises over a matter under the FTA and a substantially equivalent matter under any other international agreement that binds both countries, including WTO, the complaining country may select the forum in which to settle the dispute. Such a possibility is real since obligations that countries accept under an FTA may significantly overlap with those in WTO. A critical element of Chapter 29 is Article 29.11(8), which provides that a panel constituted under the FTA to settle a dispute between the two countries shall consider relevant interpretations contained in the WTO panel and Appellate Body reports. This provision, also present in other FTAs such as the India-UAE and Australia-UK, demonstrates the importance that India and the UK attach to the WTO jurisprudence that the US has sought to discredit. Notably, the dispute settlement chapter does not apply to chapters on government procurement, environment, and labour. This, arguably, gives India elbow-room for policy manoeuvre. In summary, the India-UK FTA represents a bold attempt to restructure the bilateral economic relationship between the two countries. Its significance, however, goes beyond just advancing bilateral trade. It validates that bilateralism and plurilateralism will be the mainstay of international trade law-making in the foreseeable future, as WTO stands essentially crippled. Furthermore, the FTA would reinvigorate India's trade negotiations with other countries, including the European Union....