India and the United Kingdom are intensifying efforts to finalize a free trade agreement (FTA) amidst looming general elections in India. With the Narendra Modi-led government eyeing a third term, both nations are eager to seal the deal before potential political shifts.
Sources familiar with the matter revealed that despite advanced negotiations, unresolved issues threaten to postpone the signing until after the elections. "Though both sides are close to signing a deal, the inking of the deal could be pushed to after the upcoming polls if consensus is not reached on certain issues, as there's hardly any time and election dates could be announced anytime now," stated one of the sources.
Currently, a British delegation is engaged in face-to-face negotiations in New Delhi, indicating the urgency from both sides to address lingering concerns. However, the Indian commerce ministry remained silent on queries regarding the progress of the discussions.
Key points of contention include visa allocations and mobility. India is advocating for increased access for its skilled professionals and certain goods in the UK market, such as nil customs duty access. On the other hand, the UK is pushing for reduced import duties on products like whiskey, electric vehicles, and chocolates.
The impending announcement of general election dates adds pressure to swiftly resolve these issues. Once declared, the model code of conduct will restrict the Indian government from introducing new economic policies, further complicating the FTA negotiations.
Recent attempts to bridge the gaps involved a visit to London by an Indian delegation led by commerce secretary Sunil Barthwal, alongside a comprehensive review of the FTA's progress by the Prime Minister's Office.
Bilateral trade between India and the UK has been on an upward trajectory, reaching $20.36 billion in fiscal year 2023 from $17.5 billion in fiscal year 2022. Both nations are committed to fostering a comprehensive and mutually beneficial trade relationship.
However, the journey towards finalizing the FTA has been marred by delays, surpassing its initial deadline by over a year.
Complex issues like professional visas, duties on various goods, and migration concerns, particularly sensitive in the UK post-Brexit, have contributed to the prolonged negotiations.
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