The FTA negotiations, which opened in January 2022, are aimed at securing an “ambitious” outcome for bilateral trade currently worth around GBP 38.1 billion a year as per official statistics from last month.
The fourteenth round of free trade agreement (FTA) negotiations between India and the UK closed on Friday ahead of the expected general election schedule to be announced by the Election Commission on Saturday. According to UK officials familiar with the discussions, the move was expected as India heads into election campaign mode and the next round of formal trade talks can commence only after the Lok Sabha polls are concluded.
The FTA negotiations, which opened in January 2022, are aimed at securing an “ambitious” outcome for bilateral trade currently worth around GBP 38.1 billion a year as per official statistics from last month. “We anticipate that while some talks might happen between rounds, the next round of negotiations will take place after the Indian elections,” official sources in the UK said.
“Neither side is walking away from talks. It’s just that we don’t have what we need yet to finalise a deal that meets our joint ambition across goods, services and investment. We’re very proud of the track record we have and how far we’ve been able to come with this trade deal so far. Negotiators have worked really hard in the past few years and we’ve managed to get a lot of chapters closed,” the sources said.
The development follows a phone call between Prime Minister Narendra Modi and his UK counterpart, Rishi Sunak, earlier this week when both leaders reaffirmed their commitment towards “securing a historic and comprehensive deal” and reiterated the importance of reaching an “ambitious outcome”.
“The UK and India are continuing to work towards an ambitious trade deal. Whilst we don’t comment on the details of live negotiations, we are clear that we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people and the economy,” a UK Department of Business and Trade spokesperson said.
Last week, Commerce and Industry Minister Piyush Goyal told PTI in an interview in New Delhi that long-term benefits for the economy were the key in such FTA negotiations and that India was seeking a “balanced, fair and equitable” deal.
His UK counterpart, Secretary of State for Business and Trade Kemi Badenoch, said during a trade conference in London earlier that while a trade deal with India is “possible” before general elections in the country, Britain does not want to use that as a deadline.
“The bigger the country, the more complex the trade agreement. And also, the more different the economy is, the harder it is to negotiate India is still very protectionist, where we are very, very liberalised,” Badenoch noted.
The UK wants India to significantly reduce tariffs on UK exports such as food, cars and whisky that can currently be as high as 150 per cent. India in turn is concerned about the fairness of rules applied to Indian workers temporarily transferred to the UK on business visas who have to pay national insurance, despite not being eligible for UK pensions or social security benefits.