Intensive negotiations ongoing for Diwali trade pact with India, says UK

Intensive negotiations are ongoing to meet target to conclude majority of India-UK free tre agreement (FTA) talks by Diwali, UK government sources said on Thursday.

Officials said that both countries continue to negotiate a “high-ambition free tre agreement” that could boost UK economy by more than GBP 3 billion by 2035.

“ UK and India set a target to conclude most of talks by Diwali (24th October) and intensive negotiations are ongoing,” sources said.

Officials familiar with negotiations also sought to realign issue of mobility by drawing a distinction between temporary business visas and long-term migration, saying business mobility is not same as immigration because business mobility covers temporary entry for talent to work for a specific time period in a tre partner country.

“Any commitments we seek on temporary entry will aim to encourage best and brightest talent in India to temporarily work in UK,” official sources said.

It follows UK Home Secretary Suella Braverman’s very vocal concerns over what she dubbed an “open borders” approach with India as part of an FTA, which many feared may have pushed FTA negotiations off course from an October-end timeline because issue of mobility lies at heart of what India would consider a win-win tre deal.

Meanwhile, sources in New Delhi said that country wants a fair, equitable and mutually beneficial free tre agreement with UK and it is asking for relaxed visa norms for its talented professionals.

“We do not want open borders. We just want temporary visas for our talented professionals for business purposes to promote services exports. India wants a fair, equitable and mutually beneficial FTA with UK,” a source ded.

According to UK government, any agreement with India on visas and migration would fall within country's wider points-based immigration system and be subject to Cabinet approval.

While UK’s Department for International Tre (DIT) refused to comment on “live negotiations”, it did not rule out prospect of Diwali deline being met and said deline was “focusing efforts and driving progress”.

“ UK has a close, positive working relationship with India and a thriving tre partnership worth over GBP 24 billion in 2021. We continue to seek improvements to our current tring relationship, and this is why we are negotiating a high-ambition Free Tre Agreement,” a DIT spokesperson said.

“We remain clear that we won’t sacrifice quality for speed, and will only sign when we have a deal that meets both countries’ interests," spokesperson said.

re has been intense speculation in recent days over Diwali timeline for FTA, which was announced by former Prime Minister Boris Johnson during his India visit in April. However, since n UK has undergone much political upheaval with Johnson being replaced by Liz Truss and a new Cabinet team in place.

A tre deal with India, expected to more than double bilateral tre by 2030, is considered a major victory for new Prime Minister in an orwise tumultuous few weeks overshowed by financial markets turmoil.

Strategic experts on both sides are of view that if Diwali deline for FTA is still met, result may be a much less comprehensive deal than was expected, leaving key sectors open for future negotiations.

UK Tre Secretary Kemi Benoch seemed to lay groundwork for this last week, when she said that an FTA with India would not mean that “we can’t do even more later”. On UK side, some of key asks are around opening up of India’s legal services sector and slashing of high tariffs on Scotch whisky. For India, issue of talent mobility and digital data are among some key factors.

On January 13, both countries launched Free Tre Agreement negotiations.

India's exports to UK stood at USD 10.5 billion in 2021-22, while imports aggregated at USD 7 billion.

India's main exports to UK include rey-me garments and textiles, gems and jewellery, engineering goods, petroleum products, transport equipment, spices, pharmaceuticals and marine products.

Imports from Britain include precious and semi-precious stones, ores and metal scraps, engineering goods, chemicals and machinery.

In services sector, UK is largest market in Europe for Indian IT services.