There are no immediate indications about the impact of the recent political developments in Britain on the advanced India-U.K. negotiations for a free trade agreement (FTA) which aims at further strengthening economic ties between the countries, an official said.
On July 7, British Prime Minister Boris Johnson announced his resignation as Conservative Party leader following an unprecedented mutiny from within his Cabinet and after being abandoned by his close allies in the wake of a series of scandals that rocked his government, triggering a leadership election for a new Tory leader who will go on to become his successor.
In January, both countries formally launched talks for a free trade agreement, which aims to boost bilateral trade and investments.
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In such pacts, two countries either eliminate or significantly reduce customs duties on the maximum number of goods traded between them, besides easing norms for promoting investments and services trade.
“The development in the U.K. has happened very recently… We have not received any indications about having any effect of resignation on the ongoing FTA talks. Since the Conservative Party is still going to be in the government, we do not see any immediate problem and we have not heard of any reason which may affect the strong bilateral partnership between India and the U.K.,” the official said.
The official added that the talks are at an advanced stage and both sides have agreed on many chapters of the proposed pact.
Getting a good, fair and equitable trade deal that would boost exports and create numerous jobs across India is the priority, the official said.
When asked about meeting the deadline of concluding talks, the official said: “FTA negotiations are very complex area and they involve a lot of careful assessment of different elements of FTAs and we continue to do that in right earnest both sides and we will put in our best effort to meet these very challenging deadlines.”
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In April, Prime Minister Narendra Modi and his then U.K. counterpart, Boris Johnson, had set the deadline for Diwali for the negotiating teams to conclude the FTA talks. Diwali falls on October 24 this year.
The U.K. is also a key investor in India. New Delhi has attracted foreign direct investment of $1.64 billion in 2021-22. The figure was about $32 billion between April 2000 and March 2022.
India's main exports to the U.K. include ready-made garments and textiles, gems and jewellery, engineering goods, petroleum and petrochemical products, transport equipment and parts, spices, metal products, machinery and instruments, pharma and marine items.
Major imports include precious and semi-precious stones, ores and metal scraps, engineering goods, professional instruments, non-ferrous metals, chemicals and machinery.
In the services sector, the U.K. is one of the largest markets in Europe for Indian IT services.
