2024-03-15 19:23:20
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Talks on a UK-India trade deal, originally scheduled to conclude before Diwali in October 2022, have been put on ice until following India’s general election later this spring following the failed final efforts to find a breakthrough.
UK Prime Minister Rishi Sunak stressed in a call this week with Narendra Modi, his India counterpart, that the discussions had to yield “an ambitious outcome on goods and services”.
Britain has been demanding better access for UK professional services companies to the Indian market as well as big cuts in tariffs on exports, including whisky and cars.
Meanwhile, New Delhi wants to secure a better mobility deal for its workers who take jobs in Britain, particularly in the IT sector, as well as lower duties on its textile exports.
Boris Johnson, former UK prime minister, claimed that a trade deal with India might be secured by October 2022, arguing that it would be a flagship accord following Britain’s exit from the EU.
But months of haggling, including a frenetic 14th round of talks this week, failed to engineer a breakthrough that both sides might accept.
Although British officials insist negotiations will resume once India’s elections are over — they are expected between April and May — time is running short for any agreement before a UK general election, expected in the autumn. Modi is expected to win, but opinion polls suggest Sunak is likely to lose.
The UK Department for Business and Trade said: “The UK and India are continuing to work towards an ambitious trade deal. Whilst we don’t comment on the details of live negotiations, we are clear that we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people and the economy.”
Sunak this week discussed the talks with Modi and both agreed on “the importance of securing a historic and comprehensive deal that benefits both countries”, according to Downing Street.
An attempt by India to claw back social security payments worth tens of millions of pounds for its workers in the UK has recently become a new sticking point in the trade talks.
“Neither side is walking away from talks,” said one British official. “We simply do not yet have what we need to finalise a deal that meets our joint ambitions.”
“The UK has been crystal clear that we won’t agree a deal until we reach ambitious outcomes on goods, services, and investment,” they added.
Jonathan Reynolds, Labour’s shadow trade secretary, said on a recent trip to New Delhi that the main opposition party, if elected, would seek a “mutually beneficial” trade deal with India.
Labour has a 20-point polling lead over the Conservatives, according to the Financial Times’ general election poll tracker.
Tory officials have claimed that Reynolds’ talks with Piyush Goyal, India’s commerce minister, last month complicated the search for a deal. Reynolds said that was “ridiculous”.
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