UK government crosses fingers over hopes for India trade deal

TRADE talks between the UK and India are nearing their final “but trickier” stages, government sources revealed to the BBC.

With Kemi Badenoch, Trade secretary, visiting India for a meeting of G20 trade ministers on August 23 and 24, conjecture has grown about striking a trade deal  before PM Rishi Sunak’s visit in September.

“Currently there is no expectation in government that a full deal will be agreed by then,” the BBC was told.

They hoped a deal was now only months away, the same sources said, but emphasised that there were still some “big nuts” to crack.

After leaving, Europe a trade agreement with India has been regarded as one of the UK’s biggest goals. In April 2022, former Prime Minister Boris Johnson, promised that a deal would be settled “by Diwali” which was held last year in October.

Johnson’s deadline came and went, but the UK is still very keen to reach an agreement with India that would result in lower tariffs for UK products like cars and whisky which at present are burdened with triple-figure taxes that make them less competitive.

Over the past 12 months, the trade talks have come up against several obstacles, the biggest of which has been Britain’s refusal at this stage to grant more visas for Indian workers.

The UK also hopes that India will agree to allowing a greater number of UK business firms and service industries to establish themselves in the country.

“This would be a considerable achievement, especially for UK travel, business or financial services,” William Bain, head of Trade Policy at the British Chambers of Commerce said to the BBC.

“Up to 80 per cent of the UK economy is services-based,” he pointed out, adding that this was one of the last areas where India would want to reach agreement at this point.   “That’s where it has leverage,” Bain explained.

“Having much more visa access to the UK will be part of the key things that get a deal over the line,” he said.