London: India and Britain are provisionally scheduled to embark on quite ambitious negotiations later this month, with the objective of arriving at a services driven Free Trade Agreement (FTA) between the two countries by early 2024.
A source close to the process stated that there is “a meeting of political minds”; in other words, both Boris Johnson and Narendra Modi are streenuously behind the move. This could mean flexibility where otherwise, if left to bureaucrats, there would be rigidity.
An upbeat UK India Business Council (UKIBC) posted on its website: “We believe it is both the right ambition and is eminently achievable.”
The UKIBC, however, added: “An open dialogue between businesses and government will be critical for successful FTA negotiations.”
It has already held 18 pre-FTA consultation roundtables with businesses as part of consultation and gathering intelligence. These took place in partnership with the British government’s Department of International Trade (DIT).
The DIT said: “Preparations for the launch of negotiations for the UK-India FTA remain underway, and DIT continues to engage counterparts in the government of India.”
It confirmed that bilateral working groups had met face-to-face in Delhi in October.
The new British Secretary of State for International Trade, Anne-Marie Trevelyan, met Indian Commerce Minister Piyush Goyal for the first time at the G20 trade ministers’ meeting in Sorrento, Italy, in October. The DIT indicated that at this dialogue, they discussed “final preparations for the launch of UK-India FTA negotiations”.
Goyal and Liz Truss, who was Trevelyan’s predecessor and is now the Foreign Secretary, had reportedly got along very well. The Cabinet reshuffle, an observer felt, was unlikely to make a difference and described Trevelyan as “determined and enthusiastic” about getting an FTA done.
FTA negotiations are generally long and tortuous. India and the European Union, for example, have been grappling with the issue for 14 years without a positive outcome. However, the source close to the upcoming Indo-British talks disclosed the intent on both sides is to announce a deal by early 2024, as both countries are due to hold general elections in spring of that year. It is feared that a multi-government involvement on either side could scuttle negotiations.
The DIT on the one hand and the Ministry of Commerce and Industry of the Indian government on the other are expected to issue their respective mandates, which will form the basis of negotiations for the two sides. The mandates will set out priorities and red lines.
The negotiations will in the foreseeable future be held virtually. Information trickling out from insiders suggest that it will be a services rather than goods driven approach by both parties.
“Data, Fintech and Information Technology” are the buzzwords doing the rounds.
There is discussion as to whether the FTA should be phased in or proclaimed all in one go. Goyal is said to be keen on “a limited early harvest agreement by March 2022”.
At a virtual summit on May 4 last, Johnson and Modi had unveiled what they called a “transformational” Comprehensive Strategic Partnership, with the signing of a UK-India Enhanced Trade Partnership. This committed the two nations to double trade — which in the last financial year was at around 20 billion pounds — by 2030. Covid-19 has obviously come in the way of progress on this front.