The India-UK free trade agreement faces prolonged negotiations, India struggles to prioritize its demands

The anticipated free trade agreement between India and the United Kingdom is likely to face further delays due to ongoing disagreements, particularly surrounding trade in goods and services

India is finding it challenging to discern between its essential requirements and desired preferences during the negotiations. Although the two nations initially aimed to finalize the agreement by the end of this month, progress has encountered a slowdown.

Reportedly, the progress has been hindered by difficulties in India opening its markets to British professional services, including legal and accounting firms. This impasse in negotiations marks a significant hurdle in the path toward India’s first comprehensive agreement with an industrialized nation.

According to figures from the UK Department for Business and Trade (DBT), bilateral trade between the UK and India was valued at approximately 36 billion pounds in 2022.

UK Business and Trade Secretary Kemi Badenoch clarified, “We have never set a deadline. I think this is very optimistic briefing for newspapers. We are very close. It is possible, but I wouldn’t be setting that sort of deadline. We will finish when we finish,” when addressing the possibility of a return visit by UK PM Rishi Sunak for the signing of the FTA.

Responding to queries about the FTA’s progress, Sunak emphasized that he would not rush the process. The Indian government has affirmed that both nations are nearing the finalization of the deal and are actively resolving outstanding differences. Commerce Secretary Sunil Barthwal emphasized that discussions on critical matters are underway.

Of the 26 chapters in the agreement, encompassing goods, services, investments, and intellectual property rights, a majority have been concluded. High-level discussions are ongoing to address the remaining issues.

The Indian industry is advocating for increased access for skilled professionals, particularly from sectors like IT and healthcare, in the UK market. They are also seeking market access for various goods with no customs duties.

Conversely, the UK is pushing for a substantial reduction in import duties on items such as Scotch whiskey, automobiles, lamb meat, chocolates, and certain confectionery items. Additionally, Britain is seeking more opportunities for UK services in Indian markets, particularly in areas like telecommunications, legal services, and financial services (banking and insurance).