Team Blitz India
OPTIMISM marks the India-UK free trade agreement (FTA) talks despite a team of negotiators from the UK – which was in New Delhi since March 4 to sort out arduous issues – returning home without closing the deal.
Speaking at a Global Trade conference, UK Secretary of State for Business and Trade, Kemi Badenoch, expressed optimism about the possibility of concluding the FTA with India before the upcoming general election in the country. He shared caution on setting deadlines.
The UK team was in New Delhi to discuss pending issues such as India’s demand for more visas for its workers and a social security agreement, and Britain seeking access in India’s Government procurement and inking a bilateral investment treaty before the pact.
Political sensitivities
India wants an agreement where its professionals working for a limited period in the UK can avoid double contributions to social security funds. Indian workers, especially those in Britain’s IT sector, would benefit from this.
With both countries preparing for elections this year, political sensitivities are adding to the technical issues which are making the latest round of negotiations a challenging one. The Secretary acknowledged the potential for reaching a consensus before the elections, but was against setting strict deadlines. Badenoch emphasised the need for substantive outcomes over hasty resolutions.
The 14th round of talks, which began on January 10, are poised at a crucial point where officials representing the two countries are hopeful of resolving remaining issues and finalising the pact.
Tricky visa issue
The Guardian, in a recent report quoted a UK Government official as saying that a British delegation (which has since departed) was making a “last-gasp attempt to clinch an FTA before the Indian election campaign pauses talks”. It reported that that the UK negotiators “are hearing from India that they will get more out of Labour on visas and social security”. Visas are especially tricky for Rishi Sunak, because Conservative MPs are deeply concerned about net migration into the UK, which hit a record high in 2022, the newspaper added.
It was said that the impact has been from Labour’s trip to India and meeting Union Minister of Commerce and Industry Piyush Goyal.
Waiting for Labour
Shadow Business Secretary Jonathan Reynolds met the minister during a trip to New Delhi in February. The visit “rankled with Government figures who are concerned that India may decide to hold out until after the UK general election in the hopes of getting a better deal from Keir Starmer’s Government. Labour is projected to win a majority,” according to the report.
The Election Commission of India is expected to notify Parliamentary polls soon when parties will have to abide by the model code of conduct and trade talks may also be suspended.
The Sunak Government, too, is gearing up for election, which is due this year. Thus, it has a narrow window to seal the deal with India which is seen as a huge economic pact since Brexit happened.
