The UK and India have been attempting to reach an agreement to strengthen their 38.1 billion pound bilateral trade relationship; however, the talks have come to a standstill because to Britain’s general election and India’s phased election.
The two-year-old Free Trade Agreement (FTA) negotiations are anticipated to pick back up now that both elections have concluded.
A break from previous Labour Party policies under Jeremy Corbyn, Keir Starmer, the leader of the Labour Party and likely the next prime minister of the United Kingdom, has consistently stated that he wishes to keep positive relations with the Narendra Modi government.
The party’s election manifesto, which emphasized its “commitment to pursue a new strategic partnership” with India, also made a strong mention of the FTA.
Keir Starmer’s goal to improve ties with one of the fastest-growing economies in the world is demonstrated by his commitment to establish a new strategic partnership with India and increase bilateral collaboration in the areas of technology, security, education, and climate change. The UK’s demand to reduce tariffs—which can reach 150%—on important exports, like as cars and food, continues to be a stumbling block in the trade negotiations.
Furthermore, the negotiations are still hindered by concerns about the UK’s immigration rules, specifically with regard to Indian workers in the service sector.
India has responded by expressing worries about new UK rules that would jeopardize the tariff concessions agreed upon in the FTA, such as the carbon tax, which is similar to the EU’s carbon border adjustment mechanism.
May saw the resumption of conversations between Indian and UK officials virtually, with an emphasis on economic assessments and the agreement’s incorporation of new disciplines like the environment, labor, gender issues, and digital commerce.
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In spite of the obstacles presented by the UK’s impasse, India is dedicated to furthering its international economic interests. It is presently negotiating free trade agreements (FTAs) with a number of other countries and organizations, including the EU, Australia, Peru, and the Eurasian Economic Union.
The future of the India-UK Free Trade Area is still unclear since it depends on important concerns being resolved as both nations navigate their post-election environments.
