Speaking at Rashtrapati Bhavan, the magnificent home of India’s president, in April 2002, former U.K. Prime Minister Boris Johnson’s assessment of free trade agreement (FTA) talks between the UK and India was typically confident. “We are telling our negotiators: get it done by Diwali in October,” he said after receiving a ceremonial welcome on the grounds of the colonial-era building designed by Sir Edwin Lutyens. But as often proved the case when Mr. Johnson promised to get things done, his actions sadly failed to meet the lofty ambition of his words. Two years on, the promised FTA is yet to be signed.
Encouragingly, the Labour government has made clear its determination to complete the task, a commitment underlined by visits to India this year by senior figures including Deputy PM Angela Rayner, Secretary of State for Business and Trade Jonathan Reynolds, and Foreign Minister David Lammy who said: “Our Free Trade Agreement negotiations is the floor not the ceiling of our ambitions to unlock our shared potential and deliver growth, from Bengaluru to Birmingham.”
Talks to resolve several key issues are expected to resume later this month following an eight-month hiatus due to elections in both countries. India is pushing for more access to the U.K. market for its skilled professionals in sectors like technology and healthcare, while the U.K. wants greater opportunities in India for its service industries like telecoms, legal services, and banking. Balancing those wish lists and then selling the deal to their respective electorates will require care in London and New Delhi.
The U.K. also wants India to cut import duties on goods ranging from meat and chocolate to electric vehicles and Scotch whisky. Indian Prime Minister Narendra Modi knows, however, that those tariffs help to protect jobs in his country.
Take Scotch whisky which is popular in India but currently makes up just 2% of the market due to the 150% tariff on imported liquor. A cut to the import duty could drive sales of up to £1 billion over the next five years, according to The Scotch Whisky Association, but it might threaten sales of India’s homegrown whisky brands which have been soaring in recent years.
For all that, the foreign secretary’s ambition is correct. According to the UN’s COMTRADE database, the value of exports by India and the U.K. was nearly equal in 2023. India’s population is more than 20 times greater than that of Britain. Further, India…
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