Prime Minister Narendra Modi on Thursday said he and his British counterpart agreed on “the importance of early conclusion of a comprehensive and balanced” free trade agreement (FTA).
Congratulating Rishi Sunak on assuming the role of the UK’s Prime Minister, Modi tweeted that both the sides will “work together to further strengthen our Comprehensive Strategic Partnership”.
Thanking Modi for his “kind words”, Sunak, too, tweeted: “The UK and India share so much. I’m excited about what our two great democracies can achieve as we deepen our security, defence and economic partnership in the months & years ahead.”
Modi and former British Prime Minister Boris Johnson had set the Diwali (October 24) deadline for concluding the proposed FTA. However, the political and economic turmoil in the UK and the national mourning following the demise of Queen Elizabeth-II delayed the negotiations.
Analysts don’t expect the deal to be clinched in 2022, given the complexity of negotiations and divergence of views in areas ranging from visa to government procurement, rules of origin in case of alcoholic beverages and data storage. However, a deal with limited scope can be hammered out early, instead of a wide-ranging, full-fledged modern FTA that goes beyond the traditional pillars of goods, services and investment, they have said.
Both India and the UK launched formal negotiations in January for the FTA, which was expected to cover more than 90% of tariff lines. They aim to double bilateral trade of both goods and services to about $100 billion by 2030. The India-UK trade is dominated by services, which make up about 70% of the overall annual commerce.