UK negotiators fly to India in last-ditch effort to seal free-trade deal
The Guardian | 5 March 2024
UK negotiators fly to India in last-ditch effort to seal free-trade deal
by Eleni Courea
British negotiators have flown to India in a last-ditch attempt to clinch a trade deal amid concerns that Narendra Modi’s administration intends to hold out for a Labour government.
A team of negotiators led by a senior civil servant flew out on Monday with a mandate to resolve the goods and services chapters, which are among the thorniest outstanding issues in the talks.
Boris Johnson and Liz Truss also sought to secure a multibillion pound free-trade agreement (FTA) with India, a booming economy of 1.4 billion people. It is seen as one of the biggest Brexit prizes.
A UK government official said the British delegation was making a “last-gasp attempt to clinch an FTA before the Indian election campaign pauses talks”.
But they added: “UK negotiators are hearing from India that they will get more out of Labour on visas and social security. That has been the impact of Labour’s trip to India and meeting with trade minister, Piyush Goyal.”
The shadow business secretary, Jonathan Reynolds, met Goyal during a trip to Delhi last month. His visit rankled with government figures who are concerned that India may decide to hold out until after the UK general election in the hopes of getting a better deal from Keir Starmer’s government. Labour is projected to win a majority.
Visas and social security are among the most politically sensitive parts of the proposed deal. India wants to secure more visas for Indian workers and an agreement to claw back social security payments they make while working in the UK.
Visas are especially tricky for Rishi Sunak, because Conservative MPs are deeply concerned about net migration into the UK, which hit a record high in 2022.
Some figures around the business and trade secretary, Kemi Badenoch, are increasingly pessimistic about the India deal and see a free-trade agreement with the Gulf Cooperation Council as being within closer reach. Badenoch met trade ministers from all six GCC countries – Bahrain, Kuwait, Oman, Qatar, Saudi Arabia and the United Arab Emirates – in Abu Dhabi last week.
The UK-India negotiations have been in the final stages for weeks, and both sides are now privately warning that time is running out before India’s general election campaign begins.
India’s election is expected to take place in April or May. The electoral commission is expected to set an exact date in the next few weeks, and trade talks will be suspended once the campaign begins.
If the UK election happens this spring, the next few weeks may be Sunak’s last chance to finalise an agreement. But if, as expected, it happens in the autumn, there is a narrow window for a deal to be agreed over the summer.
The UK and India are currently in their 14th round of negotiations, which began on 10 January. Johnson had originally hoped to sign an agreement by Diwali in October 2022.
A spokesperson for the Department of Business and Trade said: “We have always been clear we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people and the economy. The UK and India continue to work towards an ambitious trade deal that works for both countries.”
