India’s commerce minister Piyush Goyal has warned the new Labour government not to impose a strict deadline on negotiations for a free trade agreement with the UK.
Talking to the FT, he said the two sides were “pretty much on board on most of the issues we have discussed”.
This follows a call last week between the countries’ respective prime ministers, Narendra Modi and Sir Keir Starmer, at which the latter said that he “stood ready to conclude a deal that worked for both sides”.
Goyal also said that Labour has committed to continuing the negotiations for the agreement.
No deadline
The UK and India began talks for the deal in January 2022, with the UK prime minister at the time, Boris Johnson, claiming that a deal could be finalised within six months.
Goyal, however, says that his country does not support the idea of reintroducing a prescriptive timeline on the talks.
“India does not believe any [free trade agreement] should have a deadline for negotiations.
“We never discuss any FTA with any country or group of countries with a gun [to] our head.”
Goyal also said that any deal signed between the two countries would need to be “equitable, fair and balanced”.
Stumbling blocks
Under the previous Conservative administration, immigration had proven to be a stumbling block in the talks, with India pushing for more high-skilled visas for IT and healthcare workers.
UK firms have also raised concerns about IP protections and restrictive rules of origin for key exports such as cars.
At the start of the talks in 2022, the UK government claimed that a deal could “create huge benefits for both countries”, potentially boosting “total trade by up to £28bn a year by 2035”.
Reduced tariffs on car and whisky exports were hailed as potential wins for the UK.
Trade remedy investigation
It is hoped that a deal will open up bilateral trade across various sectors, but in the shorter term, the UK is looking at whether it can loosen restrictions on the import of polyethylene terephthalate (PET) from India.
PET is a plastic that is used to produce beverage bottles, packaging for food products and some textiles.
The British government’s Trade Remedies Authority (TRA) announced yesterday that it had “initiated a new transition review into a countervailing measure” on PET from India.
Under the measure, which was inherited from the UK’s previous membership of the EU, duties applied to Indian PET range from nil to 13.8%.
