UK makes last effort to seal free-trade deal with India

In a final effort to secure a trade deal, British negotiators have flown to India amid concerns that Prime Minister Narendra Modi’s government may be waiting for a potential Labour government. Led by a senior civil servant, the team aims to address challenging issues in the goods and services chapters, with Boris Johnson and Liz Truss also working to secure a significant free-trade agreement (FTA) with India, considered a major post-Brexit prize.

The UK government sees this mission as a “last-gasp attempt” to finalize an FTA before India’s upcoming election campaign pause in talks. There are concerns that India might anticipate a more favorable deal on visas and social security from a potential Labour government, influenced by Labour’s recent trip to India and meetings with trade minister Piyush Goyal.

Jonathan Reynolds, the shadow business secretary, met Goyal in Delhi, sparking worries among government figures that India might delay negotiations until after the UK general election in hopes of securing a better deal from a potential Labour-led government.

Visas and social security are key sticking points in the proposed deal, with India seeking more visas for its workers and an agreement on reclaiming social security payments. The issue of visas is particularly challenging for Chancellor Rishi Sunak, as Conservative MPs express deep concerns about net migration, which reached a record high in 2022.

There’s a growing sense of pessimism among some around the business and trade secretary, Kemi Badenoch, regarding the India deal. Some believe that a free-trade agreement with the Gulf Cooperation Council (GCC) may be more achievable, given Badenoch’s recent meeting with trade ministers from Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, and the UAE in Abu Dhabi.

As the UK-India negotiations reach their final stages, both sides are privately acknowledging the limited time before India’s general election campaign begins in April or May. If the UK general election also occurs this spring, Chancellor Sunak faces a narrow window to finalize an agreement, but if it’s expected in the autumn, negotiations may extend into the summer.

Currently in the 14th round of negotiations that began on January 10, both parties had initially aimed to sign an agreement by Diwali in October 2022. The Department of Business and Trade emphasizes the commitment to a fair and balanced deal, while Labour denies engaging in negotiations with the Indian government, placing the responsibility on the UK government to fulfill its promises.

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