The India-UK Free Trade Agreement (FTA) negotiations are expected to stay on track despite a change in government in the UK as there is “bipartisan” support for the deal in the country, official sources said.
Trade experts, too, believe that the talks will remain largely on course although the new Labour government, could have a harder stand on some issues such as labour that may be settled through mutual compromises.
“The interest in the UK in forging an FTA with India is across parties. The Labour Party’s wish to continue FTA negotiations with India has been made amply clear in its election manifesto,” an official tracking the matter told businessline.
The UK’s Labour Party, led by Keir Starmer, has come back to power after 14 years of Conservative rule. Starmer, so far, has given indications that his party would not be against the proposed India-UK FTA that was initiated by former UK PM Boris Johnson and is in its crucial last lap. The trade pact is estimated to double bilateral trade to $100 billion by 2030.
Apart from the election manifesto, Starmer expressed his support for the India-UK FTA in his address at the India Global Forum last year. “What my Labour government will seek with India is a relationship based on our shared values of democracy and aspiration. that will seek a free trade agreement (FTA). We share that ambition…but also a new strategic partnership for global security, climate security, economic security,” he said.
High-profile deals
The Labour government will have to complete high-profile deals like the one with India to ensure its credibility, said Biswajit Dhar, former Professor at JNU.
“There will, of course, be some hard negotiations over Mode 4 (movement of workers), given Labour’s hard stand on immigration. At the end of the day, I expect that there will be some compromises on both sides that could see the deal through,” Dhar said.
The Labour Party is expected to recognise the benefits of the India-UK FTA, as it opens access to a large and growing Indian market, said Ajay Srivastava from research body Global Trade and Research Initiative. “The India-UK FTA is nearly finalised, and with a few minor adjustments like curtailing number of visas for India professionals, the Labour Party may likely give its approval. This could set the stage for the agreement to be signed as early as October this year,” he said.
The tricky areas in the negotiations include rules of origin, market access for vehicles (including EVs) and Scotch, easier work visas for Indian workers, liberalisation of financial services and tightening of intellectual property rights.