With a proposed Free Trade Agreement (FTA) between India and the United Kingdom (UK) facing stumbling blocks, Prime Minister Narendra Modi and his newly-elected British counterpart Rishi Sunak on Thursday “agreed on the importance of early conclusion of a comprehensive and balanced” pact.
“Glad to speak to Rishi Sunak today. Congratulated him on assuming charge as UK PM. We’ll work together to further strengthen our comprehensive strategic partnership. We also agreed on importance of early conclusion of a comprehensive and balanced FTA,” Modi tweeted after his first interaction with the UK PM.
Sunak responded saying, “Thank you PM Modi for your kind words as I get started in my new role. The UK and India share so much. I’m excited about what our two great democracies can achieve as we deepen our security, defence and economic partnership in the months and years ahead.”
As the Chancellor of the Exchequer, Sunak had expressed support for the FTA, which, he said, presented enormous opportunities for the fintech and insurance sectors.
Data localisation and UK companies being allowed to bid for Indian Government contracts are among the issues causing a possible deadlock in the final stages of the India-UK FTA negotiations as it missed the Diwali deadline.
Incidentally, UK Foreign Secretary (External Affairs Minister) James Cleverly will arrive in India on Friday for his first official trip to the country to meet his counterpart S Jaishankar and discuss strengthening the UK-India relationship. He will visit Mumbai on Friday and travel to New Delhi on Saturday. In Mumbai, he will pay his respects to those who lost their lives in the city’s terror attack at the Taj Palace Hotel in 2008.
On Saturday, he will travel to New Delhi to speak at the special meeting of the UN Security Council Counter-Terrorism Committee. He will call on countries to work together to fight online terrorism, including global terror recruitment campaigns and live streaming of attacks.
Modi’s call to Sunak assumes significance as the negotiations of the FTA between India and the UK were earlier scheduled to be over by October 24 coinciding with Diwali. The proposed pact is part of the “Roadmap 2030” envisaged during talks between Prime Minister Modi and then UK Prime Minister Boris Johnson in May last year.
This issue was reportedly flagged by External Affairs Minister Jaishankar during his telephone call to his counterpart Cleverly on Tuesday hours after Sunak assumed charge as the new Prime Minister.
Jaishankar later said they “Discussed counter-terrorism, bilateral relations and the Ukraine conflict”.
Britain has completed the majority of sections of the free-trade agreement with India but will only sign off on the deal once happy that it is fair and reciprocal, Trade Department Minister Greg Hands said on Wednesday.
“We have already closed the majority of chapters and look forward to the next round of talks shortly,” Hands told parliament. The Government had previously said it wanted to complete the deal by Diwali, a deadline which passed earlier this week.
In January, both countries formally launched talks for a free trade agreement to boost bilateral trade and investments. In such pacts, two countries either eliminate or significantly reduce customs duties on the maximum number of goods traded between them, besides easing norms for promoting investments and services trade.
The UK is major investor in India. India’s main exports to the U.K. include ready-made garments and textiles, gems and jewellery, engineering goods, petroleum and petrochemical products, transport equipment and parts, spices, metal products, machinery and instruments, pharmaceuticals and marine items.
Major imports include precious and semi-precious stones, ores and metal scraps, engineering goods, professional instruments, non-ferrous metals, chemicals and machinery. In the services sector, the UK is one of the largest markets in Europe for Indian IT services.
The bilateral trade has increased to $17.5 billion in 2021-22 compared to $ 13.2 billion in 2020-21. India’s exports stood at $ 10.5 billion in 2021-22, while imports were $7 billion.
As regards Cleverly’s schedule, officials said here on Thursday, he is due to meet Jaishankar to discuss the latest on the 2030 Roadmap, the landmark commitment to boost cooperation between the UK and India over the next decade under a Comprehensive Strategic Partnership.
Since it was launched last year, huge progress has been made, including the start of ambitious free trade negotiations, the expansion of our defence and security partnership, including through a visit to India last year by HMS Queen Elizabeth and the Carrier Strike Group (CSG), and joint exercises to enhance cyber security collaboration.
Cleverly said, “Our relationship with India is hugely important to me; as the world’s largest democracy, India is a natural partner for the UK in the Indo-Pacific. It is an economic and tech powerhouse. Our deeper ties will boost both our economies and help to tackle global security challenges.”
He also said, “I look forward to working even more closely with India when it takes up the G20 Presidency in December.” India and the UK aim to increase bilateral trade to $100 billion by the end of this decade.