The India-UK Free Trade Agreement (FTA) negotiation is no where near conclusion as certain tricky issues in goods, services and government procurement still need to be sorted out. But talks on the pact remain on track irrespective of unfavourable comments made by some UK officials on Indian migrants, sources said.

While meeting the ambitious Diwali deadline is difficult, there is no official word yet on whether Prime Minister Narendra Modi will go ahead with the UK visit in November. “If the PM’s visit takes place next month, the two sides may announce some development around the FTA. However, it is very difficult to wrap up a full-fledged trade pact by then as the talks are no where near conclusion,” the source said.

The India-UK FTA negotiation was formally launched in January 2022 by Commerce and Industry Minister Piyush Goyal and UK Trade Secretary, Anne-Marie Trevelyan, with expectations of a doubling of bilateral trade to $100 billion by 2030. The FTA talks are comprehensive covering a number of areas such as most traded goods, services, including work visa issues, digital economy, gender and government procurement.

Meeting interests

UK Home Secretary Suella Braverman recently said in an interview that she feared a trade deal with India would increase migration to the UK when Indians already represented the largest group of visa overstayers. This led to media speculation on the fate of the pact but both governments remained positive on the negotiations. Following Braverman’s comments, Ministry of External Affairs Spokesperson Arindam Bagchi had said last week that India and the UK were interested in concluding the FTA negotiations at the earliest keeping in view that it proves to be a “win-win” for both.

The same view was echoed by a spokesperson of UK PM Liz Truss on Thursday. “We do want to secure this ambitious trade deal, we do want to seek to conclude talks by Diwali ... but we are clear that the UK won’t sacrifice quality for speed and we will only sign when we have a deal that meets both countries’ interests,” the spokesperson told reporters.

Points of contention

In the area of goods, last-minute wrangling is still on for reduction of import duties on wine and spirits and automobiles, which are both protected sectors in India. While India has agreed for tariff reduction in both areas, Britain wants steeper and faster cuts. UK is also eager for binding commitments in the area of procurements made by the Indian government and digital trade.

India, while stressing on market access for labour-intensive products, also wants a more liberal work visa regime for its skilled workers, especially in the IT sector.