Three British prime ministers, over a dozen rounds of negotiations, two missed Diwali deadlines, and general elections later, India and the United Kingdom hope to resume their talks for a much awaited free trade agreement (FTA) under the Keir Starmer-led Labour Party government next month.
India-UK FTA talks were launched 34 months ago, under the Conservative government headed by former British prime minister Boris Johnson, with a target to seal the deal in nine months. However, political instability in the UK, unresolved differences over various issues, and general elections in both nations during April-July further delayed the deal.
The UK is India's 14th largest trade partner, with total trade at $11.5 billion during the first six months of the current financial year (April-September). The UK was also India's fourth largest export destination during the same period.
Exports from India stood at $7.3 billion, up 12 per cent year-onyear. Imports from the UK stood at $4.2 billion, up 30 per cent year-on-year.
Though thorny issues are largely expected to remain even under the new government in the UK, the Labour Party is seen as being more sensitive' to a scenario of possible job losses and labour concerns back home, as compared to the Conservative Party, which was seen as 'pro-business'. As a result, reaching agreements on modern trade issues such as labour, environment, and a social security pact may become even more challenging.
Labour, environment
For instance, in the FTA talks, the Labour Party-led government in Britain will most likely expect stronger commitments on labour and environment. During negotiations so far, India has been pushing hard to conclude such chapters on a 'best endeavour' basis or without any binding commitments.
Experts pointed out that it will be difficult to finalise the deal if India was unwilling to change its stance on some of these issues.
This story is from the December 06, 2024 edition of Business Standard.
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This story is from the December 06, 2024 edition of Business Standard.
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