Skip to content
Search

Latest Stories

India, UK struggle to make progress in free trade talks

Both countries are aiming to double bilateral trade by 2030 through the trade deal

India, UK struggle to make progress in free trade talks

India and Britain are struggling to make progress in free trade talks due to differences on some key tariff lines and investment protection rules, making a deal unlikely during prime minister Narendra Modi's second term ending next year, Indian sources said.

The two nations are unable to agree on concessions on duties levied by India on car and liquor imports, a government official with direct knowledge of the matter said.


Besides tariffs, Britain is also pushing India to agree on strong investment-protection provisions either as part of the deal or in a parallel investment treaty, according to a second government official.

"Britain has insisted on investor protection if it were to proceed with a final deal," said the person who has direct knowledge of the talks.

A deal between India and the UK is crucial for New Delhi, which hopes to become a bigger exporter, while the UK would get wider access for its whisky, premium cars and legal services.

For India, a deal with the UK would be its first with a developed country after it signed an interim trade pact with Australia last year. It comes at a crucial time for Modi, who is looking to solidify India's business-friendly image in the run up to national elections next year.

Britain, on the other hand, has prioritised a deal with India as part of its Indo-Pacific foreign policy tilt aimed at enhancing ties with the region's fast-growing economies.

The main disagreement on the investment protection provisions is Britain's insistence that its companies be allowed to seek international arbitration should a dispute arise without going to Indian courts first, said the second government official who is directly involved.

This would be a marked departure from India's present provision that calls on companies to exhaust local remedies first, and is not agreeable to the Indian government, said a third senior government official.

"We had kept November as another soft deadline. But does not look like this is going to work out till at least next year. Maybe after the general elections in India," a fourth government official said.

Both nations are set to hold general elections next year where India's Modi will seek a rare third term while British prime minister Rishi Sunak faces a stiff test of electoral popularity after a choppy term for the Tories.

As of the end of April the countries were unable to complete discussions on any more chapters than they had in December. They have agreed on terms of 13 out of 26 chapters that constitute the pact.

The two countries have also ruled out the possibility of an interim pact, two of the sources said.

All officials spoke to Reuters on the condition of anonymity as negotiations over the trade agreement are private.

India's ministries of trade, finance and external affairs did not respond to a request for comment.

A spokesperson for the UK's Department of Business and Trade said the two countries are "committed to working towards the best deal possible for both sides."

"We are clear that we will only sign when we have a deal that is fair, balanced, and ultimately in the best interests of the British people and the economy,"  the person said.

Sunak's approach to focus on quality over speed of the deal is in contrast to Boris Johnson, who as prime minister had set a deadline of Diwali last October for a deal, which was then missed under the tenure of his successor Liz Truss.

(Reuters)

More For You

Shein-Reuters

Shein had aimed to go public in London in the first half of this year, subject to regulatory approvals in the UK and China. (Photo: Reuters)

Shein cuts valuation to £40 billion for London listing

SHEIN is preparing to lower its valuation to around £40 billion for a potential initial public offering (IPO) in London, according to three Reuters sources familiar with the matter.

This is nearly 25 per cent lower than the company's 2023 fundraising valuation as it faces increasing challenges.

Keep ReadingShow less
Northern-Superchargers-Getty

Ben Stokes and Matthew Short of Northern Superchargers walk out to bat during The Hundred match between Manchester Originals and Northern Superchargers on August 11, 2024 in Manchester, England. (Photo: Getty Images)

Sunrisers Hyderabad to acquire Northern Superchargers in £100 million deal

INDIAN Premier League franchise Sunrisers Hyderabad is set to become the first full owners of an English Hundred team after agreeing to buy Yorkshire’s Northern Superchargers for a reported £100 million.

The Sun Group will be the third IPL-linked investor in the eight-team Hundred competition, following Reliance Industries, which owns Mumbai Indians, and RPSG, which runs Lucknow Super Giants.

Keep ReadingShow less
BT-Getty

A view of the British Telecom (BT) headquarters in central London. (Photo: Getty Images)

BT to remove diversity targets from manager bonuses

BT will remove diversity, equity, and inclusion (DEI) targets from its manager bonus scheme, replacing them with a measure of overall employee engagement.

The change, set to take effect in April, follows consultation with major investors and has received “strong support,” according to the company, The Telegraph reported.

Keep ReadingShow less
India's central bank cuts interest rates for first time since 2020

The central bank announced a 25-basis-point cut in the benchmark repo rate to 6.25 per cent, the rate at which it lends to commercial banks.. (Photo credit: Reuters)

India's central bank cuts interest rates for first time since 2020

THE RESERVE BANK OF INDIA (RBI) reduced interest rates on Friday for the first time in nearly five years, citing concerns over economic growth despite inflation risks.

The central bank announced a 25-basis-point cut in the benchmark repo rate to 6.25 per cent, the rate at which it lends to commercial banks.

Keep ReadingShow less
Sri Lanka seeks to negotiate with Adani over renewable energy plants

Gautam Adani

Sri Lanka seeks to negotiate with Adani over renewable energy plants

SRI LANKA’S government started talks with India’s Adani Group to lower the cost of power from two wind power projects the group will build in the island nation’s northern province, the cabinet spokesman said last Tuesday (28).

Sri Lanka has been reviewing the group’s local projects after US authorities in November accused billionaire founder Gautam Adani and other executives of being part of a scheme to pay bribes to secure Indian power supply contracts. Adani has denied the allegations.

Keep ReadingShow less