India has communicated to the UK that the window to seal the India-UK FTA deal is open for a very short time – till the model code of conduct comes into effect once the general elections are announced – failing which the negotiations will need to pause till the new government is in place, sources have said.

The UK is now on a diplomatic overdrive with its negotiating team, led by Douglas McNeill, chief economic advisor to UK PM Rishi Sunak, meeting top decision-makers in New Delhi this week, a source tracking the matter told businessline. The team has met Commerce & Industry Minister, Piyush Goyal, and senior officials in the Prime Minister’s Office (PMO), and the Finance and Commerce Ministry.

Some of the areas on which both sides continue to disagree are business visas, rules of origin, IPR, final duty-cuts on Scotch and automobiles, financial services and an investment pact.

“The UK delegation is pushing to see if a meeting ground can be reached in the few areas where talks are stuck. There is no closing date for the ongoing negotiating round that started on January 10. Both sides are serious, but not desperate. Both don’t want quality to be compromised,” the source said.

Most of the work in all the 26 chapters of the proposed India-UK FTA is done, with about 21 almost closed, but there are small niggling issues, involving one or two articles, that are left in some, the source said.

“The areas of disagreement are not that many. But if both keep holding to their positions, there is no meeting ground. And it takes time to find a solution,” the source said.

Time is something that may not be in abundance, with the Election Commission likely to announce the schedule for the country’s general elections any day. “For us, the model code of conduct is the cut-off. You can’t do an FTA during the MCC. For the UK, of course, it is not. But they understand,” the source said.

Of the contentious areas, business visas is one where India is determined to get a commitment, but the UK continues to be reluctant. “India has made it clear that it is only interested in business visas and not in immigration. It is already benchmarked in the FTAs India has signed so far (with countries such as Australia and the UAE) and can only go up and not down,” the source said.

Rules of origin (ROO), that prescribe the minimum processing which needs to happen in a FTA partner country, also needs to be completely ironed out. India has apprehensions that liberal ROO may lead to items from EU countries, including automobiles, processed food and engineering goods, being exported to India at preferential duties, couched as UK products. The UK, which has supply chains integrated with the EU, wants liberal rules. “A lot of permutations and combinations are being looked into,” the source said.

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