NEW DELHI: The free trade agreement (FTA) between the UK and India is unlikely to happen because of political instability and economic crisis in the former country, people familiar with the matter told TNIE.
The sources also confirmed the cancellation of Prime Minister Narendra Modi’s visit to London for the signing of a bilateral agreement between both countries.
“PM Modi was slated to travel to London around Diwali time for the trade pact between the UK and India. But now due to political instability and economic turmoil in the UK, the visit has been cancelled,” a government source added. He added that the FTA is unlikely to materialise in 2023.
Meanwhile, a commerce ministry official said the deal can only happen if it is beneficial for the country.
“The pace of negotiation between both countries got impacted due to political instability in the UK. At this point, it is difficult to conclude the trade deal. We can’t put any timeline to it as we couldn’t meet the Diwali deadline. Entering into FTA can be beneficial if it is fair and balanced,” the official added.
The decision comes in the backdrop of the recent controversial remarks of UK Home Secretary Suella Braverman who resigned on Wednesday on Indians being visa overstayers. In an interview with The Spectator magazine, she had flagged concerns about a trade deal between the UK and India as it would lead to an increase in migration of more Indians who represent the largest group overstaying their visas in the UK.
However, later she tried to nuance her comment saying that immigration from India has profoundly enriched the UK’s states, towns and villages. She also added that the UK is eager to secure a trade deal with India.
It is also believed that the UK authorities are in no hurry to seal the trade deal in a hurry as they do not want to sacrifice quality for speed. India had total trade of USD 17.5 billion with the UK in 2021-22. India’s exports to the UK in 2021-22 were worth $10.5 billion while imports from the country were at USD 7 billion.
Besides this, FTA with Israel has been put on hold for time being, as India is not getting a fair deal.
“We will enter into a trade deal with Israel only if we get a fair deal. The day we get a good deal, we will go ahead with the FTA. It is still in the works,” the official stated.
India-UK trade pact