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14-03-2024
Bureau Report + Agencies
NEW DELHI/ LONDON: Indian Prime Minister Narendra Modi and British counterpart Rishi Sunak reaffirmed their commitment to securing a new trade deal in a call on Tuesday, as the prospect of an agreement ahead of elections in India fades.
Britain and India have held stop-start talks over a Free Trade Agreement (FTA) for two years. Both countries are set to hold national elections in 2024. Modi will bid for a rare third term, with the election dates expected to be announced soon.
“We reaffirmed our commitment to further strengthen the bilateral comprehensive strategic partnership and work for early conclusion of a mutually beneficial free trade agreement,” Modi said in a post on X on Tuesday after the call with Sunak.
However, while some progress has been made, an early conclusion of talks seems less likely after British negotiators returned from India last week without agreement on a range of key issues. Trade minister Kemi Badenoch has said talks were “challenging” and that the Indian election wasn’t a deadline.
British ministers have said that they are prepared to take their time to strike the right deal, rather than accept a more limited agreement that might be quicker to negotiate – a point Sunak stressed on Tuesday in his call with Modi.
“The Prime Minister (Sunak) reiterated the importance of reaching an ambitious outcome on goods and services,” Sunak’s spokesperson said in a readout of the call.
“They agreed to remain in close contact and looked forward to further progress on trade talks.”
The conversation between the two leaders comes two days after India signed a free trade pact with a group of European nations Switzerland, Norway, Iceland and Liechtenstein – committing to reduce tariffs, while New Delhi receives $100 billion in investments over the next 15 years.
Meanwhile, India will lift most import tariffs on industrial products from four European countries in return for investment of $100 billion over 15 years, its trade minister said, after an economic pact signed on Sunday that concluded nearly 16 years of negotiations.
The deal follows trade pacts over the last two years with Australia and the United Arab Emirates, while officials say another, with Britain, is in its final stages, as Prime Minister Narendra Modi aims for annual exports of $1 trillion by 2030.
It envisages that the European Free Trade Association, comprised of Switzerland, Norway, Iceland and Liechtenstein, will invest $100 billion over 15 years in India’s fast-growing market of 1.4 billion people, Trade Minister Piyush Goyal said.
In turn, India will lift, or partially remove, very high customs duties on 95.3% of industrial imports from Switzerland, excluding gold, either immediately or over time, the Swiss government said in a statement.
