UK PM Sunak sees no quick-fix trade deal with India, deadline now ‘off the table’: Report
UK PM Rishi Sunak and Indian PM Narendra Modi
As the British economy falters, many in the UK view the prospect of the UK-India free trade agreement (FTA) as a blessing in disguise. Successive governments in the country had promised an FTA between the UK and the world’s fastest-growing major economy by October last year; however, the idea still remains a distant dream.
Now UKPrime Minister Rishi Sunakhimself has ruled out a quick-fix trade deal with India ahead of the G20 summit in New Delhi later this week. In fact, many in the administration believe the talks may not get through even before next year’s general elections.
Sunak sees no early harvest deal
The much-awaited FTA between the two large economies would see India lower tariffs on goods such as whisky and the UK slashthose on Indian textiles.
As both the UK and India are set to hold general elections next year, many believe the trade deal will be negotiated only after that. That’s why many officials in the UK government now insist on taking the deadline off the table altogether for concluding the deal.
“There was talk last year of a deal by last Diwali, but that was only going to happen if it was a shallow deal based around a limited number of goods. Kemi Badenoch [the trade secretary] and Rishi Sunak have decided they don’t want to go down that route and so have taken a deadline off the table,” The Guardian reported citing a government source.
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Watch:UK: PM Rishi Sunak under fire over India-UK trade deal
“India wants to do an early agreement on goods, but the risk is that instead of being the start of a wider trade agreement, that becomes the endpoint and the UK doesn’t get any of the more fundamental things it wants,” said another top source in the UK government.
Disagreements still remain
People familiar with the negotiations suggest that there have been agreements in specific areas. Recent reports indicated India's willingness to cut tariffs on scotch whisky by one-third (from 100 per cent) in exchange for tax incentives for Indian workers in the UK. However, precise figures have yet to be finalised, according to British officials.
Sources suggest that these agreements could have led to the signing of a simplified trade deal this week. However, Sunak and Secretary of State for Business and Trade Kemi Badenoch have rejected this idea, fearing it would hinder the possibility of a more comprehensive agreement.
UK officials refer to the Australia-India agreement from last year, which covered a limited number of sectors and was meant to initiate broader negotiations. However, observers note that the Indian side has shown little urgency in reaching a comprehensive deal since then.
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