UK, India Defer Trade Deal Talks Until After India Election

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The UK and India have paused talks on a long-awaited trade deal until after India’s elections, as major issues on goods, services and investment remain outstanding.

The 14th round of negotiations has now closed, a person familiar with the matter said, to be resumed after India goes to the polls over six weeks from April 19. That will leave officials with only a short window to resolve the more contentious parts of the deal if the UK wishes to conclude an agreement before its own general election, expected in autumn this year.

For British Prime Minister Rishi Sunak, India presents the best chance of agreeing a major trade deal before that date. Signing off on a free trade agreement would be a vindication of his own trade strategy; while new FTAs with countries outside the European Union were touted as a key Brexit benefit, few have yet been signed.

Sunak called his Indian counterpart, Narendra Modi, earlier this week in an effort to push negotiations forward, after Bloomberg reported days earlier that the 14th round of talks was set to close with much still to be agreed.

Following that call, Modi set ambitious targets to get those issues resolved within the week, said the person who did not wish to be named as discussions are private, causing a flurry of high-level meetings.

But ultimately there was only so much which could be done within the time frame, the person said. The person added the 14th round has now closed, though some talks between negotiators may continue.

A second person with knowledge of the talks said the UK’s Department for Business and Trade, which is leading on the discussions, had been advising Sunak not to agree the deal yet as it was not as advantageous to the UK as hoped.

It comes at a time when disquiet within the ruling Conservative Party is growing against Sunak’s premiership, with some members allying themselves to political rivals including Trade Secretary Kemi Badenoch.

“The UK and India are continuing to work towards an ambitious trade deal,” a Department for Business and Trade spokesperson said in a statement.

“Whilst we don’t comment on the details of live negotiations, we are clear that we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people and the economy.”

The two countries have been negotiating an FTA for more than two years. For the UK, the process has proven difficult due to India’s protectionism.

India’s national polls will be carried out over seven phases until June 1, Rajiv Kumar, India’s chief election commissioner, told reporters in New Delhi on Saturday. The votes will be counted on June 4, he said.

Since leaving the EU, the UK has only signed new bilateral FTAs with Australia and New Zealand, which have been criticized by British farmers and members of Parliament.

Talks with Canada were “paused” by Badenoch earlier this year as both sides failed to reach a conclusion on food safety standards.

--With assistance from Colin Keatinge.

(Updates with dates of India’s election in second, 12th paragraphs.)

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