India is on track to conclude a full trade agreement with the UK by October 2022, according to its commerce minister Piyush Goyal.
Almost half of the deal’s 26 chapters are already “dusted and ready” and should be finalised “within the next few months”, he said.
The deal is expected to improve market access for goods such as British whisky and Indian textiles, as well as potentially opening up the UK to migration from students and skilled workers from India.
‘Give and take’
“Whenever you have a free trade agreement, there is always a lot of give and take,” Goyal told the FT, but declining to discuss outstanding issues.
“The challenges are there,” he added. “But there are no challenges that cannot be overcome.”
‘Deal by Diwali
Caretaker prime minister Boris Johnson has pledged that the government will achieve a deal with the world’s sixth largest economy by Diwali in October, with the latest round of talks taking place this month.
It is as yet unclear whether this timetable will remain under his as-yet-undetermined successor but negotiations are likely to continue regardless of who sits in Downing Street.
Sources close to DIT told Politico’s Pro Morning Trade UK bulletin yesterday that UK trade negotiations will continue at an official level, despite the uncertainty around the future leadership of the British government.
New Delhi talks
UK negotiators will travel to New Delhi this month to restart official talks and discuss economic issues such as India’s large barriers to the financial services sector in the City of London.
A senior source at the Department for International Trade (DIT) told City AM that it was “a good sign” that India’s government last year softened trade barriers to overseas insurance firms, which has allowed them to increase how much they can invest in the country.
“But the fact they’re already moving in the right direction on things like the insurance industry shows there is real momentum when it comes to services and that a deal can be struck,” they said.
However, the president of the Indian Wine Academy, Subhash Arora, has written that British demands for lower tariffs on automobiles and Scotch whisky are a bone of contention, describing whisky duties in particular as a ‘pain point’ in negotiations.
He said that the UK was targeting “unrealistic levels” and pointed to India’s offer to Australia on wine tariffs as an indication of what might be on the table as the country looks to protect its burgeoning wine and spirits sector
“The recent free trade agreement India signed with Australia reduced the tariff on imported wine with a minimum import price of $5 per 750 ml bottle from 150% to 100% and gradually to 50% over 10 years,” he said.