Liz Truss, who was chosen as the leader of the Conservative Party and is expected to be the next prime minister of the UK, will make a comprehensive free trade agreement (FTA) with India one of her top foreign policy goals.
Since outgoing Prime Minister Boris Johnson was one of the strongest supporters of Ukrainian President Volodymyr Zelenskyy, policymakers in New Delhi will also be closely watching Truss’ position on the Ukraine crisis and whether the new British government moves forward with a tilt towards the Indo-Pacific.
India and the UK are on track to finish talks for a full FTA by Diwali. So far, 19 of the 26 chapters have been finished. Two high-level officials who are aware of the situation said that, besides two chapters, the other five could be taken care of in a single day.
The Indian negotiating team is set to go to London soon, but sources say that the trip might not happen until the new British government has had time to settle in. Both sides are confident that they can meet the Diwali deadline, which is the last week of October. The officials asked to remain anonymous.
People who know about the situation say that the two sides want to finish the trade agreement as soon as possible, even if they can’t solve all of the problems by Diwali. Sources say that the British side has also said it doesn’t want to set up an interim trade agreement.
The UK FTA is going in the right direction. Our fingers are coming together. Commerce Secretary BVR Subrahmanyam said on Saturday that the Diwali deadline will not be missed. He was talking about the different FTAs that India is negotiating. I’m telling you.”
One of the two officials mentioned above said that two of the seven remaining chapters may take longer to finish because they have one or two topics, like vehicles, that are important to both sides.
On the Indian side, the focus has been on making it easier for professionals and students to move around and on increasing exports in labor-intensive industries like leather, textiles, jewellery, processed agricultural products, marine products, medicines, and healthcare.
The British side has made it a priority to get rid of big problems that UK companies have to deal with in order to sell their goods in India. Businesses in the UK will see more access to the Indian market as a big plus, especially as India’s middle class grows to a quarter of a billion consumers. The UK is also thinking about lowering tariffs on cars and whisky and making it easier to get digital and legal services.
The fifth round of FTA talks between India and the UK came to an end on July 29. Experts from both sides talked in depth about the language of the draught treaty in 85 meetings that covered 15 different topics. A joint statement says that officials worked hard all summer to reach the goal of finishing most of the negotiations on a comprehensive FTA by the end of October.
After leaving the European Union (EU), the UK has been eager to finish trade deals with big economies like India as quickly as possible. The UK has signed deals with 69 other countries and the EU. This year, India quickly signed trade deals with Australia and the United Arab Emirates, and it is currently in talks with the EU, Canada, and other countries.
New Delhi will be watching to see if Truss continues Johnson’s policy of strong support for Ukraine, which includes training Ukrainian troops and giving them high-tech weapons and ammunition. This is true even though the British have said they understand India’s position on the Ukraine conflict. Recently, the Royal Air Force sent heavy lift aircraft on missions to bring artillery ammunition from Pakistan to Romania.
As part of a full review of foreign and security policy, the government of Boris Johnson has also backed a move toward the Indo-Pacific. Johnson, who went to India in April, said that the UK will set up an open general export licencing regime for India to speed up the delivery of defence purchases. Johnson also said that the two countries had agreed to work together on defence and security for a longer time.
