Intensive negotiations end without agreement, with hopes to resume discussions later in the year

The United Kingdom and India have paused their free trade discussions, concluding the 14th round of negotiations without reaching an agreement. This development delays the eagerly anticipated deal until after India’s upcoming election campaign. Officials from both countries engaged in two weeks of intensive talks, aiming to finalize a Free Trade Agreement (FTA) before the commencement of India’s election period. However, these efforts did not lead to a breakthrough.

The expectation was to resume the trade talks in May or June, with the goal of securing a deal before the UK general election, scheduled for the latter part of the year. The dialogue between Prime Minister Rishi Sunak and his Indian counterpart, Narendra Modi, earlier this week, underscored the significance of reaching a comprehensive agreement on goods and services. Despite coming close to finalizing the deal, key differences on services and investment prevented a conclusion.

The UK’s primary focus has been on securing access for its services sector, which constitutes 80% of its economy, to the vast Indian market. With a population of 1.4 billion and a forecast to become the world’s third-largest economy by 2050, India represents a significant opportunity for British businesses. However, India’s reputation as a tough negotiator in trade deals, exemplified by its recent £79 billion agreement with the European Free Trade Association after 16 years of discussions, suggests a challenging path ahead.

Visa arrangements have emerged as a particularly contentious issue, with previous comments from the UK’s former home secretary, Suella Braverman, highlighting concerns over visa overstays by Indian nationals. The negotiations have also touched on reducing tariffs on British goods, such as cars and whisky, and facilitating easier access for British legal and financial services in India. In exchange, India seeks more streamlined visa processes for its workers in the UK.

Despite the delay, both leaders have expressed a commitment to strengthening their bilateral relationship and working towards a mutually beneficial free trade agreement. As discussions are set to continue later this year, the outcome of these negotiations could significantly impact trade relations between the UK and India, promising economic opportunities for both nations.