UK Election: Tories And Labour Prioritize India FTA In Manifestos

As the UK enters the final phase of campaigning ahead of the general election on Thursday, a free trade agreement with India is seen as high on the agenda no matter whether the verdict is in favour of the incumbent Tories or the Opposition Labour. Both sides have been working towards clinching a pact to enhance the GBP 38.1 billion bilateral trading partnership but with India’s phased general election followed by Britain's, the negotiations remain stalled in the fourteenth round of negotiations.

Both sides have been working towards clinching a pact to enhance the GBP 38.1 billion bilateral trading partnership but with India’s phased general election followed by Britain's, the negotiations remain stalled in the fourteenth round of negotiations.

The FTA talks formally kicked off in January 2022 when Boris Johnson was the British prime minister and have since had to contend with political turmoil that first led to a short-lived Liz Truss premiership followed by Rishi Sunak as Britain's first Prime Minister of Indian heritage.

“We will finalise a free trade agreement with India, alongside a deeper strategic partnership on technology and defence,” reads the Conservative Party manifesto, spelling out the British Indian leader's vision.

Under the Scotland section, the party manifesto references one of the UK’s key asks in the agreement to “press for the permanent removal of tariffs on Scotch whisky with the US government and work to achieve a significant tariff reduction in India through free trade agreement discussions”.

The Labour Party, meanwhile, has been focussed on highlighting how they stand ready to get the FTA over the line after the Tories missed their Diwali 2022 deadline.

“Many Diwalis have come and gone without a trade deal and too many businesses have been left waiting," David Lammy, the party’s shadow foreign secretary, said in his address at the India Global Forum in London last week.

"My message to [Finance] Minister Sitharaman and [Trade] Minister Goyal is that Labour is ready to go. Let’s finally get our free trade deal done and move on,” he said.

Labour’s manifesto pledge also echoes this sentiment, stating: “We will seek a new strategic partnership with India, including a free trade agreement, as well as deepening cooperation in areas like security, education, technology and climate change.” Lord Christopher Fox, a Liberal Democrat peer who sits on the House of Lords International Agreements Committee which scrutinises trade deals, has warned of “clear stumbling blocks” in the way towards an FTA.

“Much work has already been done to lay the foundations of an ambitious free trade agreement between the UK and India,” notes the UK-India Business Council in its own “manifesto” for a stronger bilateral partnership released in the lead up to the polls.

“Concluding the FTA promptly should be a priority for the UK government. Getting this right will mean higher economic growth, better productivity and increased private sector investment in the UK. It will also build trust and strengthen the wider UK-India partnership in areas important to both countries such as defence and security and addressing climate change,” it notes.

“We recommend that the UK government prioritises completion of the negotiations and ratification of a win-win UK-India FTA, that benefits our goods and services sectors,” it states, in its set of recommendations for an incoming British administration.

While the UK wants India to significantly reduce tariffs on UK exports, India is concerned about the fairness of rules applied to Indian workers temporarily transferred to the UK on business visas.

Indian High Commissioner to the UK Vikram Doraiswami pointed out that an FTA with the UK was in the Prime Minister Narendra Modi led government’s 100-day priority and that Delhi had placed an “unprecedented offer” on the table.

“What we're trying to do with this free trade agreement is to increase the depth or the extent of ambition, including in goods and services, that we'd like to offer to the UK,” he said, when asked about the FTA at the IGF summit.

“Visas are not the first priority for us in an FTA. We are not looking at the FTA as a means to bring people to the UK, that is not the objective. What we're looking for is whatever is reasonable within the broad framework of international trade and services under Mode 4 of GATS [General Agreement on Trade in Services of the World Trade Organisation] to be able to have persons travelled for intercompany transfers etc,” he stressed, with reference to the UK media's focus on visas in relation to the trade talks.