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When we last reported about the much-awaited FTA between India and the United Kingdom, it was stuck at an impasse while in the final stage. Data localisation (to prevent foreign companies from taking data out of India) and UK companies being allowed to bid for Indian government contracts have been reported among the issues causing the possible deadlock.
In the latest developments, there are speculations that Rishi Sunak being elected as Britain’s first Indian-origin Prime Minister may become a fresh wind of optimism around the FTA. It should be noted that both countries wanted to sign the FTA by Diwali this year, even though the Department for International Trade (DIT) said that the FTA would be agreed only if it meets UK’s interests. The October deadline was set during former PM Boris Johnson’s visit to India earlier this year.
Noting that the economy is going to be a top priority for UK Prime Minister Rishi Sunak, Alex Ellis, British High Commissioner to India said, “India is a big investor in the UK and vice-versa. We want to double trade by 2030 and Free Trade Agreement (FTA) is an excellent way of doing that. It’s a long way to get to FTA, we’ve walked through the foothills, gone up the valley, got to base camp and now we need to do this short and sharp ascent. I think both countries are determined to reach the summit.” He also termed Sunak’s appointment as PM of the United Kingdom a ‘historic moment’.
Sunak has been rather vocal about his support towards growing bilateral trade relations between the two countries. According to him, financial services are particularly ‘exciting’ aspect of the bilateral trade relationship, while the fintech and insurance sectors hold enormous opportunities for both.
“I’m very supportive of India playing an increasingly influential role in the region, and indeed, in the world as a massive economy and the world’s largest democracy and an FTA would prove a greater champion of that cause,” Sunak told reporters back in July.
Trade experts are confident that Sunak’s focus on services will steer the FTA in the right direction. They also expressed that the delay in signing the FTA will help to prioritise the aspects important to the agreement.
There are also others who say that Sunak not having visited India as Chancellor of the Exchequer may present a negative outlook.
“Rishi Sunak is yet to be tested on foreign policy and defence issues. Having been born in the U.K. with parents originating from East Africa, he has not been a public advocate of strong ties with India during his parliamentary and ministerial stints. Indeed, as Chancellor of the Exchequer for over two years, he did not visit India even once. There is no indication that this outlook is likely to change as Prime Minister when he needs to focus on a much larger foreign and security canvas,” said Rahul Roy-Chaudhury, Senior Fellow for South Asia at the International Institute for Strategic Studies (IISS), a think tank in London.
Last week, even as Liz Truss resigned as UK’s PM, Piyush Goyal (Union Minister for Commerce and Industry) said that the Agreement is on track. Goyal said that India will wait for the change in leadership before formulating a strategy vis a vis the UK.
India’s FTA with UK may bargain a range of products and services from textiles to alcohol, automobiles, pharmaceuticals as well as subjects like labour movement, intellectual property enforcement and data protection.
