(MENAFN- Live Mint) New Delhi: Talks on a Free Trade Agreement (FTA) between India and the UK are expected to resume after a three-month gap, two people familiar with the development said, ahead of new foreign secretary David Lammy making his maiden visit to India next week.
The Labour party came to power with a massive majority in general elections held earlier this month, ousting the weakened Conservatives. General elections in both India and the UK were among factors holding up talks on the FTA.
“The dates for his visit have not yet been finalized. However, it is expected that he may arrive in New Delhi on or after 23 July," the first among the two people mentioned above said.
“During his visit, Lammy is set to engage in dialogue with key leaders, including external affairs minister S Jaishankar and commerce minister Piyush Goyal, regarding the ongoing UK FTA negotiations to help resolve the remaining issues,” this person said requesting anonymity.
It hasn't been smooth sailing for the FTA.
Many sticking points
Key sticking points for the UK include high Indian tariffs on Scotch whisky , New Delhi's demand for easing mobility for Indian professionals, and the UK's demand for tax relief for its electric vehicles.
London also wants substantial duty cuts for British lamb meat, chocolates and confectionery.
The Indian industry seeks increased access for skilled professionals from sectors such as IT and healthcare in the UK market, as well as for zero customs duty on several goods.
The India-UK FTA talks were paused when a senior British delegation cancelled its planned visit to New Delhi following the announcement of general elections in the UK.
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Britain's newly-elected Prime Minister Keir Starmer spoke to Prime Minister Narendra Modi on 13 July and said he stood ready to conclude an FTA that worked for both sides.
Mint first reported on 27 May that the British team, originally scheduled to arrive on 28 May, had cancelled its visit. The UK's senior team was expected to finalize terms on contentious issues including mobility, duty relaxations, and electric vehicles.
“With the Labour Party 's victory perceived as mutually beneficial for India and the UK, there is optimism about expediting the FTA. Both sides are currently negotiating the 14th and final round of talks that commenced on 10 January this year,” the second person said.
"India is eager to see positive developments in the India-UK FTA talks, and we are hopeful that dialogue will resume with a positive perspective," this person said.
A 'positive development'
Experts see Lammy's visit as a positive development.
“It seems the UK government, under the Labour Party's leadership, will maintain its stance. Their manifesto states that they will continue the strategic partnership with India and finalize the FTA with India,” said Biswajit Dhar, economist and retired professor at Jawaharlal Nehru University.
“This is logical because, for a swift recovery, the UK needs a market like India. Therefore, they will aim to close the deal as soon as possible,” Dhar added.
Queries emailed to ministries of commerce and external affairs remained unanswered till press time. A British High Commission spokesperson said,“Ministerial travel will be set out in the usual way.”
New Delhi has been optimistic about advancing the trade deal, which has been in the works for years.
After the most recent visit to London in the second week of May, Indian negotiators claimed“substantial progress” in mobility and electric vehicles.
Bilateral trade increased to $21.34 billion in the FY24 from $20.36 billion in FY23. India's goods exports to the UK amounted to $12.98 billion in FY24, up from $11.46 billion in FY23.
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