Clock ticking for India-UK FTA to be signed before polls

New Delhi: The governments of India and the United Kingdom have a very short window to complete the negotiations and sign the Free Trade Agreement (FTA), with some points of contention still to be resolved, and no guarantee that it will be signed during Prime Minister Narendra Modi’s current term, top sources in the central government have told DH.

If the deal is not done by late-January, it is unlikely that it will then be completed before the 2024 Lok Sabha elections, as the focus will shift to the Budget Session and then the model code of conduct may come into force, assuming the elections take place in April-May, a similar schedule to that of 2019.

“Once the model code of conduct is in force, no new policy can be announced,” said an official. “There are many issues yet to be resolved, and a middle ground has not yet been reached,” the person said.

During the New Delhi G20 Leaders’ Summit, PM Modi and his British counterpart Rishi Sunak agreed to expedite and seal the “ambitious” trade talks between the two countries.

Originally the FTA was to be signed by the two heads of states on the eve of the India-England cricket World Cup match in late October.

Now, Diwali has been set as a tentative deadline, with some reports suggesting that it could be signed by Modi and Sunak after the latest round of state elections in India.

However, talks drag on. Indian officials believe they are negotiating from a position of strength as increased access to Indian markets is one of the policy promises of Sunak in post-Brexit Britain.

“We are not seeing any concession from the British side on our wants. Primarily, we want more access to UK and tariff benefits as well, especially for our textile and services/software sectors,” the official said.

“Talks are expected to continue the whole of November. After that we have two windows. The first part of December, and the latter part of January. One can discount late December-early January period as that is the Christmas-New Year festive season, especially for the West,” the person added.

Sticking points still include Rules Of Origin, Intellectual Property Rights, whether taxation will be included in the proposed investment protection pact, as well as the UK’s demand that tariffs be cut on electric vehicle exports to India.

The Commerce Ministry, headed by Piyush Goyal, has maintained that the discussions are at an “advanced stage” and that negotiations are going on to iron out the differences.