India, UK unlikely to finalise FTA before ’23

NEW DELHI: India and the UK are unlikely to finalise a trade deal before 2023, largely because of the political turmoil in Britain and differences within the outgoing Liz Truss (she resigned Thursday) government on issues such as mobility of professionals and immigration, people familiar with the negotiations said.

Though both sides continue to be engaged in negotiations for the free trade agreement (FTA), it is now becoming increasingly clear the earlier deadline of Diwali will not be met, the people said. The Indian side has firmed up its stance on key issues such as mobility of professionals, students and automobiles and indicated it will not budge on these, they added.

The bigger problem at the moment, the people pointed out, is the turmoil within the British government following the resigfollowing

Turmoil in UK government after Liz Truss’s resignation from the PM’s post is adding to the delay. nation of Truss. On Wednesday, interior minister Suella Braverman quit, becoming the second senior minister to depart in less than a week, after former finance minister Kwasi Kwarteng was sacked.

“The signing off on the FTA is not expected till next year. At best, there could be some sort of announcement this month,” one of the people cited above said, declining to go into details.

The Conservative Party government is facing problems in striking a balance between its promise to counter immigration Britain’s exit from the European Union (EU) and the need to facilitate the mobility of overseas professionals and students. Braverman’s remarks that the FTA would increase immigration from India didn’t go down well in New Delhi.

The two countries are also yet to agree on a few contentious issues key for a comprehensive FTA, a second person said.

“Gone are the days when India was desperate to sign a bilateral or multilateral trade deal because of fears of being left out. India signs FTAs from a position of strength. Deals with Australia and the UAE are testimony to this. India is not desperate, which was proven when Prime Minister Narendra Modi decided to quit the Regional Comprehensive Economic Partnership (RCEP), one of the largest trading blocs, at the eleventh hour because it was... majorly benefiting a neighbouring country,” the second person said.

A spokesperson for India’s commerce ministry said: “The government of India is committed to work with the government of the UK on all issues of interest in the negotiations for the FTA. It would not be appropriate, given that the negotiations are underway, to comment on timelines or on any issue that is under discussion between the two countries.”

Commerce secretary Sunil Barthwal told reporters on the sidelines of the CII National Exports Summit on Thursday that negotiations are still on and an agreement would be reached soon.

Ajay Sahai, director general and chief executive of the Federation of Indian Export Organisations (FIEO) said: “With the rising political and economic uncertainties in UK, the earlier decided timelines for finalising the FTA may not be adhered to as priority of the country may change. However, there is no question mark on FTA, which is mutually beneficial to both economies...”