UK Secretary of State for International Trade Kemi Badenoch is likely to visit India next week to hold talks with her counterpart Piyush Goyal on bilateral trade and the proposed India-UK free trade agreement (FTA), which could not be sealed by the Diwali deadline, officials have said.
The sixth round of India-UK FTA negotiations is scheduled to begin on December 12 where negotiators will hold face-to-face talks for the first time after UK’s new Prime Minister Rishi Sunak took charge in October this year.
New Govt’s approach
“The two sides will discuss tricky issues yet to be ironed out, such as market access for automobiles, whisky, and processed food, visa rules for workers and students, IPRs, government procurement and financial services. Although no major change in the UK’s stance is expected in most areas as there is no change in the ruling party, the negotiations could provide more clarity on the Sunak government’s approach to work visas,” an official told businessline.
Badenoch and Goyal’s meeting, lined up for December 13, is expected to add momentum to the FTA negotiations that would be held simultaneously, the official added.
Negotiations delayed
India and the UK launched the FTA negotiations in January 2022 and set a target of doubling bilateral trade to $100 billion by 2030. The Diwali deadline for wrapping up the FTA talks set by then British Prime Minister Boris Johnson and Indian Prime Minister Narendra Modi lapsed as the political turmoil in the UK did not allow negotiations to proceed at the required pace.
“Now that the Sunak government has brought in stability, negotiations are resuming and hopefully will proceed fast. The new goalpost could be March 31, 2023, but nothing has been formally decided,” the official said.
What UK wants
Although about 19 of the 26 chapters to be covered in the India-UK FTA have been more or less settled, the road ahead is bumpy. One of the main areas that still needs to be settled is the duty cuts that India will commit to in the areas of automobiles and parts, and wines and liquor. Both sectors are protected in India with very high tariffs. Although India has agreed to bring down tariffs in a phased manner, wrangling is still going on over the level of cuts. Processed food and some other agricultural items are also high on UK’s list of demands where India could hesitate to give in.
Areas such as government procurement, intellectual property and financial services are also problem areas, as the UK is demanding strong commitments while India’s stand is conservative.
What India wants
On the other hand, India would want a liberal visa regime for workers and students, and the UK has to be forthcoming here to get concessions in other areas. Home Secretary Suella Braverman earlier this year expressed her concerns about the proposed India-UK FTA leading to increased immigration.
New Delhi also wants the elimination of tariffs on labour-intensive items such as garments, textiles, and leather products.