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India, UK free trade deal unlikely to finalise by month end: Report

Business Standard | 18 October 2023
By Shreya Nandi

India, UK free trade deal unlikely to finalise by month end: Report

India and the United Kingdom (UK) are unlikely to ink the much-anticipated trade deal by the end of October due to unresolved differences over market access issues, especially in services, according to a Financial Times report.

Both nations missed last year’s Diwali deadline for the deal set by former British Prime Minister Boris Johnson last year. With general elections in both countries next year, the window for a trade deal is rapidly closing. “A lack of progress” in opening up the Indian markets for British professional services, including law and accountancy firms, is one of the reasons for the delay, stated the report, quoting unnamed British officials.

“Some (services) sectors haven’t got anything close to what they might have hoped for, and negotiators have been very clear that they don’t see this deal as a game-changer…The draft deal did not appear to ‘break new ground’ in areas such as legal services,” the report said on Wednesday.

This comes amid heightened expectations that the free-trade agreement (FTA) will be signed by Prime Minister Narendra Modi and his British counterpart Rishi Sunak by the end of the month, in New Delhi. Sunak was also expected to attend the India-England cricket World Cup match in Lucknow on October 29, although no official announcement has been made.

“The UK and India continue to work towards an ambitious trade deal that works for both countries. We have always been clear we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people and the economy,” a British High Commission spokesperson told Business Standard on Wednesday while responding to a query.

Currently, the negotiations between the two nations are in the last lap, with both sides attempting to iron out the differences. Last week Commerce Secretary Sunil Barthwal said that the negotiations are at an “advanced stage”.

The UK has been seeking more opportunities in telecommunications, legal, and financial services in the Indian markets as part of the deal, while India’s focus has been on a liberalised migration policy for its skilled workers. Other contentious issues include the UK’s demands for lower tariffs on whiskey and automobiles, and chapters on rules of origin and intellectual property rights (IPR).

“We have closed chapters on most of the issues, including non-trade issues, such as digital trade, gender, labour. The main challenge remains on the goods and services front,” said a person aware of the development.

In August, UK Secretary of State for Business and Trade Kemi Badenoch stated that she was working closely with her counterpart Piyush Goyal to ensure that both countries could deliver something mutually beneficial. “With any negotiation, the hardest bit tends to come at the end. We have closed many chapters. We’ve done many, perhaps more simple tasks, we’ve come to accommodations in several areas, and we are now in the final stages. I can’t give a deadline, anything can happen,” Badenoch had said on the sidelines of the G20 Trade and Investment Ministerial in Jaipur.

 source: Business Standard