Lok Sabha polls nearing, PMO reviews UK free trade agreement progress

Officials say 'political call' now needed to fructify proposed deal

As general elections draw nearer, the Prime Minister's Office (PMO) has reviewed the progress of the proposed free trade agreement (FTA) with the United Kingdom (UK), 

according to people in the know. Top officials from the commerce department made a presentation on Wednesday about contentious issues in the proposed FTA, sources said, adding that negotiations had reached a stage where a ‘political call’ was needed to fructify the proposed deal.

The 14th round of negotiations in New Delhi between India and the UK began on January 10.

“The negotiation is at a crucial stage and was scheduled till 19 January, although both countries are yet to reach a common 

ground on some of the issues, including market access for goods. Stakeholder consultations are also going on at the moment,” one of the persons cited above told Business Standard.

Unofficial discussions suggest that India may impose a ‘model code of conduct’ towards the end of February ahead of general elections. This means that both sides will have to resolve their differences before that.

“Discussions are being held at the ‘higher level’, as well as at the team level to iron out differences,” the department of commerce had said last week.

The negotiations for the much-anticipated trade deal between India and the UK were launched over two years ago on January 13, 2022. Till now, 14 rounds of negotiations have taken place, although some disagreements remain. These include the UK's demands for lower tariffs on whiskey and automobiles, including electric vehicles, as well its attempt to seek more opportunities in telecommunications, legal, and financial services in the Indian markets.

Similarly, India is bargaining hard to seek an exemption from London's planned carbon border tax from 2027 on imported goods and an inclusion of a social security agreement.

Other tricky areas include chapters on rules of origin and intellectual property rights.

Both sides were earlier aiming to finalise the trade deal in October last year in the presence of Prime Minister Narendra Modi and his British counterpart Rishi Sunak in New Delhi. However, both nations felt they needed more time to sort out differences in the proposed agreement.

Bone of contention 

Even after 14 rounds of negotiations both nations haven’t been able to solve some issues. These include...

UK’s demands for lower tariffs on whiskey and automobiles, including electric vehicles, opportunities in telecom, legal and financial services in Indian markets, etc

India’s bargain for an exemption from UK’s planned carbon border tax, inclusion of a social security agreement, etc