Financial Express | 10 September 2023
India-UK FTA talks appear deadlocked
by Mukesh Jagota
Prime Minister Narendra Modi on Saturday held meetings with his counterparts from the UK and Japan on the sidelines of the ongoing G-20 summit here, with trade and investment being the key focus of talks. However, the much-awaited trade and investment pact with the UK looked to face further delays , going by the statements of Modi and British prime minister Rishi Sunak after their bilateral meeting.
“We discussed ways to deepen trade linkages and boost investment. India and UK will keep working for a prosperous and sustainable planet,” Modi posted on ‘X’ after the meeting.
Sunak said he was confident a deal with India could be secured but cautioned “there was still hard work to do.” “There’s a desire on both of our parts to see a successful trade deal concluded…but there is a lot of hard work that’s still to go,” he told reporters. “There has to be a win-win for both countries.”
India and the UK are negotiating a free trade pact and an investment agreement. The negotiations have been intense and have entered the last leg where the most contentious of the issues under are being dealt with.
While both sides are hopeful of an early conclusion of talks, they are unwilling to be bound down by the deadlines. Before embarking on his visit to India Sunak was reported by the media as saying that he would agree to a trade deal only if it benefitted the whole of the UK. UK Trade Secretary Kemi Badenoch had said last month that “it was about the deal and not deadlines”.
On landing in India Sunak said in an interview to ANI, “that both Modi ji and I are keen to see a comprehensive and ambitious trade deal concluded between our two countries.”
“Trade deals always take time, they need to work for both countries. Although we have made enormous progress there is still hard work to go.”
India and the UK have held 12 rounds of negotiations on the trade agreement and closed 19 out of the 26 chapters or policy areas. Along with the trade agreement both countries are also negotiating an investment treaty.
Investment agreement, rules of origin and intellectual property rights are some of the issues that are proving to be contentious ones in the negotiations. From the Indian side, the demand for easier visas for professionals is seeing some resistance from the UK. India is negotiating hard on concessions that the UK has asked for its services industry – financial and others – to operate in India. It is also seeking lower duties from India on automobiles and wines and spirits.
In 2022-23 India’s exports to UK were $11.4 billion and imports were $ 8.9 billion. Modi and Japanese Prime Minister Kashida took stock of India-Japan bilateral ties and ground covered during India’s G20 presidency and Japan’s G7 presidency.
“We are eager to enhance cooperation in connectivity, commerce and other sectors,” Madi said in his post on ‘X’ after the meeting.
India and Japan already have a Comprehensive Economic Partnership Agreement that was signed in 2011. Japan is the largest bilateral donor to India. In the last financial year India’s exports to Japan were $5.4 billion and imports were $16.4 billion.
On Sunday, PM Modi will hold a working lunch meeting with French President Emmanuel Macron. Other bilateral meetings have been planned with leaders of Canada, Comoros, Turkiye, UAE, South Africa, European Union, Brazil and Nigeria.