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'I hope we can...' British PM Rishi Sunak reiterates commitment to India-UK free trade deal

After the G20 Summit in New Delhi, Sunak committed to an India-UK Free Trade Agreement (FTA), but said that he "would not rush things". FTA negotiations between both sides are focused on immigration, liquor among other factors.

Edited By: Aveek Banerjee @AveekABanerjee London Published on: October 03, 2023 22:23 IST
British Prime Minister Rishi Sunak
Image Source : AP British Prime Minister Rishi Sunak

British Prime Minister Rishi Sunak on Monday expressed his commitment to closer India-UK relations across various sectors, including the much-talked-about free trade deal between the two countries.

In his remarks during a reception by the diaspora group Conservative Friends of India (CFIN), Sunak reflected upon his "successful" visit to India during the high-level G20 Summit held on September 9 and 10 in New Delhi. 

"I've just come back from my first trip to India as Prime Minister and that was very successful. Everybody here already knows just how strong the relationship between our two countries is," he said at the event held on the sidelines of the Conservative Party conference in Manchester.

The 43-year-old leader further expressed hope that India and the UK shape the future of the world in the long-term as two "great democracies". 

"At the G20, we really saw a glimpse of what the future of that relationship can be, with closer cooperation on absolutely everything from trade to defence, innovation, security, research, and I hope… a free trade deal, and we can get it done," Sunak further said.

India-UK free trade deal

After the conclusion of the G20 Summit in New Delhi, Sunak committed to an India-UK Free Trade Agreement (FTA), but said that he "would not rush things". This comes as the burgeoning India-UK bilateral trade reached an estimated 36 billion pounds in 2022, according to the official UK Department for Business and Trade (DBT).

"We are very close. It is possible, but I wouldn't be setting that sort of deadline. We will finish when we finish,” UK Business and Trade Secretary Kemi Badenoch told a British parliamentary panel recently.

Badenoch had conducted the 12th round of India-UK FTA negotiations with Union Commerce Minister Piyush Goyal in August. After the meeting, she said that India is already one of the UK’s largest trading partners.

“The Prime Minister concluded Cabinet by setting out his desire to use our growing relationship in trade, defence, and technology to build a lasting and deep partnership with India which benefits the people of the UK for decades to come,” 10 Downing Street also said.

Meanwhile, Sunak has assured that the recent allegations made by Canadian PM Justin Trudeau on the "potential" involvement of the Indian government behind the killing of Khalistan terrorist Hardeep Singh Nijjar will not impact the ongoing trade negotiations.

“Work on the trade negotiations will continue as before… when we have concerns with countries we’re negotiating trade deals with, we’ll raise them directly,” said Sunak's spokesperson at 10 Downing Street.

What is FTA?

A free trade agreement is a deal between two or more countries where they agree on certain obligations that affect trade in goods and services, and protections for investors and intellectual property rights, among other topics. The main goal is to provide a better deal for citizens of the concerned countries involved. 

India and the UK have been negotiating an FTA since January last year, with a goal towards a comprehensive pact that is expected to significantly enhance the bilateral trading relationship worth an estimated GBP 34 billion in 2022. 

Why have India and the UK not struck the deal yet?

According to reports, the deal has been in a lingering state as the UK wants New Delhi to slash tariffs on British cars, and scotch whisky while India seeks some relaxation in visas for Indian professionals. As of now, India imposes a 100% duty on the import of cars from the UK-- a slab the former wants to cut down in order to make a level playing field for foreign companies.

Additionally, India has a handsome whisky market but it imposes a 150% import duty on liquor, with an aim to protect its domestic market. But sources previously claimed New Delhi may slash the import duty up to 50%.

Immigration is also a major issue for London amid the fact the country itself struggling to boost its economy and provide the maximum number of jobs to its own population. Besides, the UK's vote for BREXIT in 2016 also prompted the government to control the migration influx. 

As of now, it is not clear whether the UK would agree on visa relaxation, but the sources claimed it may allow with some terms and conditions. 

(with agency inputs)

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