London : UK Prime Minister Rishi Sunak has reiterated his commitment to securing a trade agreement with India that serves the best interests of the entire United Kingdom, according to media reports citing his spokesperson.
Sunak conveyed this message to his ministers before his departure for the G20 summit scheduled to be held in India this week. The spokesperson reportedly stated, "He emphasized that negotiations for a free trade deal were making progress and that he would only endorse an approach that benefits the entire UK."
Uncertainty surrounds the UK-India free trade deal
Despite previous assurances from successive governments regarding a Free Trade Agreement (FTA) between the UK and India, progress has been elusive. Prime Minister Rishi Sunak has now ruled out a swift trade deal with India ahead of the G20 summit in New Delhi. Some officials even speculate that the negotiations may extend beyond the upcoming general elections.
A reliable government source said, "There was talk last year of a deal by last Diwali, but that was only going to happen if it was a shallow deal based around a limited number of goods. Kemi Badenoch [the trade secretary] and Rishi Sunak have decided they don't want to go down that route and so have taken a deadline off the table."
Another senior source in the UK government stated, "India wants to do an early agreement on goods, but the risk is that instead of being the start of a wider trade agreement, that becomes the endpoint, and the UK doesn't get any of the more fundamental things it wants."
While there have been indications of agreements in specific areas, such as India's willingness to reduce tariffs on Scotch whisky in exchange for tax incentives for Indian workers in the UK, specific figures have not been finalized.
The United Kingdom has been actively seeking diversified global trade relationships since its exit from the European Union in 2020. This comes at a pivotal time for Indian Prime Minister Narendra Modi, who aims to strengthen New Delhi's business-friendly image in anticipation of national elections early next year.
Bilateral trade between India and the United Kingdom saw a 16.6 percent year-on-year increase, reaching $20.42 billion in the 2022-23 fiscal year ending in March.