Possible India-UK Trade Deal by December After Election Outcomes

28 Oct, 2023

Possible India-UK Trade Deal by December After Election Outcomes

Negotiations for a significant trade deal between India and the United Kingdom are still ongoing, with several key issues yet to be resolved. One of the main areas of contention is whether taxation will be included in a proposed investment protection pact. Additionally, the UK is pushing for a reduction in tariffs on electric vehicle exports to India. These details were shared by anonymous sources familiar with the private discussions.

While there is no fixed deadline for these negotiations, there is speculation that an official announcement may come after the election results are declared on December 3rd.

The successful conclusion of this trade deal would represent a significant milestone for two of the world's largest economies, which share a long and intertwined history. British Prime Minister Rishi Sunak is expected to highlight this deal as a tangible benefit of Brexit, while his Indian counterpart, Narendra Modi, could use it to promote increased local manufacturing and job creation as he seeks a third term in the upcoming year.

As of now, India's Trade Ministry has not responded to requests for comment on the ongoing negotiations. Meanwhile, a spokesperson for the UK Department for Business and Trade stated that both administrations are actively working toward a comprehensive trade deal that would be mutually beneficial.

Several pressing issues remain unresolved in these negotiations, including the UK's request for concessions on electric vehicle imports. Discussions are ongoing regarding the proportion of imports that could enjoy these benefits.

Another point of contention revolves around the inclusion of tax matters in an investment protection proposal. The UK is advocating for this inclusion, which is influenced by past disputes involving UK firms that invested in India.

There are also long-standing issues to address, such as India's request for longer-term post-study visas for its students who attend university in the UK. In return, the UK is seeking the opportunity for its lawyers to practice in India.

Furthermore, there is a push for easier market access for British agricultural goods, including products like apples and cheese.

Both India and the UK have previously demonstrated flexibility by softening their stances on various issues. India has agreed to reduce tariffs on British cars and scotch whiskey, while the UK has shown a willingness to relax certain visa rules for Indian professionals.

The free trade deal currently under negotiation is considered India's most ambitious and modern trade agreement to date. If successful, it could serve as a blueprint for similar trade agreements with other nations, including the European Union.