The UK’s trade secretary has refused to commit to a deadline to finalise a much-hyped trade agreement with India, but said that looming elections in both countries are increasing pressure to secure a deal.
The two countries missed an October deadline agreed by Indian prime minister Narendra Modi and his former UK counterpart Boris Johnson to secure an agreement by the Hindu festival of Diwali, following months of political turmoil in the UK.
Kemi Badenoch, who serves as trade secretary under UK prime minister Rishi Sunak, told the Financial Times that she was no longer willing to commit to a deadline, saying “my view is that timelines are not helpful”.
But she said that upcoming general elections, which are due around 2024 in both countries, would make talks “difficult” if a deal is not finalised before then.
“We know that having an election coming up does not help in terms of trying to conclude free trade agreements,” she said. “So that’s something that people know and will bear in mind and will understand in terms of the rough timelines that we will be working to.”
She added that “we need to move at pace if we want to get this done”.
The Brexiter promise of an early trade deal with the US has failed to materialise, while Johnson’s claim that an Indian agreement would be secured this autumn has also turned out to be wishful thinking.
Badenoch’s caution follows a backlash over the UK-Australia trade deal signed last year, with some Conservative MPs warning that the government had made too many concessions to Australia.
George Eustice, former UK agriculture secretary, admitted recently that the Australia deal — the most significant “new” trade deal signed since Brexit — was “not actually a very good deal for the UK”.
Most other trade deals signed by Britain since it regained its own trade powers have been “rollovers” — copy and paste renewals of deals the UK already enjoyed with third countries through its EU membership.
Badenoch travelled to New Delhi this week for the first face-to-face trade negotiations since July, after the successive collapses of Johnson and Liz Truss’s governments delayed talks. The trade secretary said that elections in the Indian state of Gujarat, which Modi’s Bharatiya Janata party swept earlier this month, had further held up negotiations.
India, one of the world’s fastest-growing economies, which has now overtaken the UK in size, presents a large opportunity at a time when Modi’s government is trying to reduce its reliance on China.
But a trade agreement with Delhi has proved controversial among some pro-Brexit Conservative MPs, with Suella Braverman, the home secretary, in October provoking anger in India for expressing “reservations” because the deal could increase immigration.
As part of the agreement, India is seeking greater access to business visas for professionals to work in the UK. Among the UK’s key demands are lower tariffs for Scotch whisky.
Indian officials have previously stated that most chapters of the deal have been finalised. Badenoch said that both sides had made progress on India’s demand for more visas, but that negotiations had arrived at their most challenging juncture.
“The few bits remaining are the difficult bits,” she said, without giving details. “So we’re just trying to work out how we will get through the tough patch to get to the final agreements.”
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