UK Election: Trade Deal with India a Key Issue for Both Tories and Labour
As the UK nears the final phase of campaigning ahead of Thursday’s (July 4th) general election, a free trade agreement (FTA) with India is a key topic for both the incumbent Tories and the Opposition Labour. Efforts to finalize this pact, aimed at boosting the £38.1 billion bilateral trading partnership, have been ongoing. However, with India’s general election followed by Britain’s, the fourteenth round of negotiations remains stalled. Initiated in January 2022 under then-Prime Minister Boris Johnson, the FTA talks have faced disruptions due to political changes, including a brief Liz Truss premiership and now Rishi Sunak’s leadership as Britain’s first Prime Minister of Indian heritage.
The Conservative Party manifesto underscores the significance of finalizing a free trade agreement with India and forging a deeper strategic partnership on technology and defence. A notable objective is the permanent removal of tariffs on Scotch whisky, seeking significant tariff reductions in India.
Labour, on the other hand, is keen to conclude the FTA, criticizing the Tories for missing the Diwali 2022 deadline. At the India Global Forum in London, Labour’s shadow foreign secretary, David Lammy, highlighted their readiness to finalize the deal. Labour’s manifesto also calls for a new strategic partnership with India, emphasizing cooperation in security, education, technology, and climate change.
Challenges persist, as noted by Lord Christopher Fox of the Liberal Democrats, who sits on the House of Lords International Agreements Committee. The UK-India Business Council (UKIBC) stresses the importance of promptly concluding the FTA, citing benefits like enhanced economic growth, productivity, and private sector investment, alongside strengthening the UK-India partnership in crucial areas such as defence and climate change.
Indian High Commissioner to the UK, Vikram Doraiswami, reaffirmed India’s commitment to the FTA, stating that it is a priority for Prime Minister Narendra Modi’s government. Doraiswami clarified that visas are not India’s main focus in the FTA, contrary to some UK media reports. Instead, the goal is to enhance trade in goods and services under the General Agreement on Trade in Services (GATS).
Navigating these negotiations remains complex, but completing the FTA is a major objective, promising mutual economic benefits and reinforcing the strategic relationship between the UK and India.
As the UK and India navigate the intricacies of their FTA negotiations, both sides recognize the profound economic and strategic benefits at stake. A successful agreement promises not only to boost bilateral trade and investment but also to strengthen collaboration in key sectors such as defence, technology, and climate change. The commitment from both the Conservative and Labour parties underscores the importance of this deal, reflecting a shared vision for a robust and dynamic UK-India partnership. Concluding the FTA will mark a significant milestone, enhancing economic growth and fostering a deeper bond between the two nations. As election day approaches, the future of the UK-India FTA remains a pivotal issue, with both countries poised to reap the rewards of a strengthened alliance.