The British government is making a final push to secure a free trade deal with India before the Indian general elections, but the task ahead is daunting, with significant obstacles to overcome.
Negotiators are facing challenges on several fronts, including India’s demands for more visas for Indian workers and the ability to reclaim social security payments made by Indian workers in the UK.
Visa liberalization for Indians is a contentious issue within the UK’s Conservative party, particularly among the far-right factions, making it a challenging topic for negotiations. Additionally, India’s request to exempt its workers from social security payments in the UK poses a significant financial burden for the UK treasury.
UK-India Trade Deal (Credits: Textile Value Chain)
Other sticking points include the UK’s desire for India to reduce tariffs on goods like Scotch whisky, while India is seeking lower duties on its textile exports. Furthermore, disagreements persist over the opening up of India’s protected legal and professional services to UK citizens.
The recent visit to India by Labour shadow business secretary Jonathan Reynolds has added a layer of complexity to the negotiations. India may believe that a Labour government would offer more favorable terms, particularly regarding visas and social security.
This perception could potentially impact the current negotiations, with India possibly holding out for better terms under a future Labour government. Despite these challenges, both sides are committed to reaching an agreement that benefits their respective economies.
However, the road ahead remains uncertain, with significant hurdles to overcome in the 14th round of talks. Key areas of contention include business mobility, automotive, farm products, pharmaceuticals, rules of origin, and bilateral investments.
While an FTA with India remains a priority for the UK, the negotiations are complex, and both sides are aware of the need to proceed cautiously. India, in particular, is keen to ensure that any concessions made in the deal with the UK do not set precedents for future FTAs, such as the one with the EU.
As negotiations continue, both sides are approaching the talks with caution, recognizing the long-term impact of any trade deal. The outcome of these negotiations will not only shape the future of UK-India trade relations but could also have broader implications for future trade agreements involving India.
