India weighs softening its stand on UK FTA, expects UK to reciprocate

Both countries have underscored the significance of finding a “feasible solution" to speed up the process, they added.

“India is planning to soften its stand on some of the sticky issues in the trade negotiations with the UK. A similar approach is expected from its counterpart, without compromising their interests," one of the two people said, seeking anonymity. Signing the bilateral trade deal holds equal importance for both nations, he added.

India and the UK initiated FTA discussions in January 2022 to bolster the economic ties. Now, they are in the midst of the 14th and what is expected to be the final round of discussions, which began on 10 January.

However, talks are currently on hold, and are expected to resume only after the Lok Sabha elections. Both countries are actively working towards a fair and balanced agreement, and are in favour of closing the deal at the earliest, considering its significance for both the economies, the second person said.

Mint reported on 7 March that the deal may be postponed until after the general elections if a consensus has not been found on outstanding issues.

Queries emailed to the spokesperson of the Union commerce ministry did not elicit a response at press time.

“The window for concluding the FTA is narrowing, given the limited time between national elections on both sides. While technical negotiations have brought us this far, a political grand bargain might be necessary to break the gridlock, and London might need a resolution more than New Delhi at this juncture," said Dr Dattesh Parulekar, assistant professor of international relations, Goa University.

UK elections are due by end-January, 2025.

“India’s recently signed EFTA agreement should exert pressure on the UK to seek a favourable outcome," he added. “The dimensions of mobility and visa facilitation privileges are crucial bottom-lines that will determine the fairness of this arrangement. Any attempt to link them with demands for expanded market access would be considered unethical and unsustainable." 

To date, the two countries have been unable to resolve key issues, including demands for visas, mobility rights for Indian skilled professionals, and tariff cuts for British cars and whisky.

Migration remains a sensitive subject in the UK since Brexit.

Recent attempts to narrow differences involved a visit by an Indian delegation led by commerce secretary Sunil Barthwal to London in February, followed by a UK team’s visit to New Delhi on 5 March to fast-track the dialogues. The Prime Minister’s Office has been reviewing the FTA’s progress.

A Department for Business and Trade spokesperson said, “The UK and India are continuing to work towards an ambitious trade deal."

“Whilst we don’t comment on the details of live negotiations, we are clear that we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people and the economy."