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NEW DELHI : India may not insist on a two-stage trade deal with the UK—an early harvest arrangement followed by a comprehensive pact if all issues are adequately addressed—as Britain is keen to conclude a full free trade agreement (FTA) without resorting to an interim deal,people familiar with the matter said.

Negotiations on the FTA are set to start before the end of the year and the British side has indicated that it prefers that the talks lead to a comprehensive pact, the people cited above said on condition of anonymity.

The two sides were expected to begin the negotiations in November, but these have been held up by scheduling issues. A top British trade negotiator visited the country in October for preliminary discussions on the FTA, which is a key part of the Enhanced Trade Partnership launched by the two sides in May.

Talks between New Delhi and London on the FTA are on the fast track, one of the persons said.

“India may not insist on a two-stage trade deal, including an early harvest deal and later a comprehensive FTA, provided the country’s concerns are adequately addressed on the principles of equality and reciprocity," the person said.

An early harvest deal could be “an immediate reality" as broad agreements on several items have been reached. “If a few issues that are currently being negotiated are resolved, a full FTA is also possible soon," the person said.

There was some apprehension on the British side that India, after concluding a possible early harvest deal, could delay substantive issues for concluding an FTA. But a second person aware of the talks said, “India has the full intention of concluding a comprehensive FTA, but it wants an early harvest deal in three to four months to showcase that the talks are substantial and progressing."

A third person added: “India is willing for give and take but it will protect the interests of its domestic industries and agriculture, particularly MSMEs and farming communities. It is reassuring that the UK also understands India’s sensitivities. Hence, a full trade deal with the UK is a possibility."

During a virtual summit between Prime Minister Narendra Modi and his UK counterpart Boris Johnson in May, the two sides set a target for doubling bilateral trade by 2030. India-UK trade was worth £23 billion in 2019.

The Enhanced Trade Partnership will see Britain open up its fisheries sector to more Indian players, facilitate more opportunities for nurses, recognize Indian seafarers’ certificates and enter a joint dialogue on a social security agreement. In return, India will lift restrictions to enable British fruit exports to the country and improved access for medical devices through the acceptance of “UK Certificates of Free Sale". The two sides will also work toward reciprocal opening up of legal services.

Both sides have also completed consultations with trade bodies on the proposed FTA. The British side is keen on the removal of barriers to doing business and trade with India, including tariffs of up to 150% on whisky and 125% on British-made cars. The Indian side wants enhanced mobility for its professionals and suitable safeguards for sectors such as agriculture.

Since its exit from the European Union, the UK has concluded trade deals with 69 countries and one with the EU. However, deals with 63 countries are “rollover" arrangements similar to those the UK had when it was an EU member.

Abhishek A Rastogi, a partner at the law firm Khaitan & Co., said an FTA between India and UK would be a win-win for both and logical after the UK’s exit from the EU. “Both countries enjoy a historical relationship and understand each other’s sensitivities. Hence, an early conclusion of negotiations is likely," he said.

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