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India is optimistic about striking a long-awaited trade deal with the UK’s new Labour government, though warned Britain not to place “a gun [to] our head” by imposing a deadline on the renewed talks, the country’s commerce minister said.
Piyush Goyal told the Financial Times that past discussions showed the two sides were “pretty much on board on most of the issues we have discussed”, and that a deal may “close very quickly”.
But he urged the UK not to repeat a mistake made by Boris Johnson when the then-prime minister promised in early 2022 that a trade agreement could be finalised within six months.
“India does not believe any [free trade agreement] should have a deadline for negotiations,” he said. “We never discuss any FTA with any country or group of countries with a gun [to] our head.”
Talks between the countries have been under way since January 2022.
In a call with Narendra Modi following the Labour party’s election win last week, Sir Keir Starmer told India’s prime minister — who was himself re-elected last month — that he “stood ready to conclude a deal that worked for both sides”.
Speaking on the day of the UK’s election, Goyal said he had secured commitments from Labour before the election that if they won they would continue negotiations, but warned that talks would not be rushed and any deal had to be “equitable, fair and balanced”.
Goyal said the deal was “something which is ready to be closed very quickly, but that it could take very long also”.
Labour won a historic majority in the election last week, securing 411 seats while the Conservatives tumbled to their worst ever election result of 121 seats.
Jonathan Reynolds, Labour’s newly appointed business and trade secretary, visited India earlier this year in his shadow role, and the party pledged in its manifesto to seek “a new strategic partnership with India, including a free trade agreement”.
The next round of formal negotiations is set to begin this month, according to local media reports.
The UK has sought lower Indian tariffs on British exports such as whisky and cars, as well as a relaxation of rules restricting its financial and professional services firms from operating in India.
New Delhi wants market access for goods such as textiles, as well as better terms for citizens to work and study in the UK.
It has also insisted that any agreement giving greater access for UK businesses must reflect the enormous growth opportunities in the world’s most populous country, whose economy is expected to expand more than 7 per cent this year.
Goyal said: “Personally if you ask me, in the FTA I don’t find any big issue left, except that we have opened up very significantly on the services side, contingent to certain commitments that we expect from the UK.”
Any deal needs “a fair balance, given our different size of population, given our different aspiration levels, given our different growth projections”, he added.
Modi’s Bharatiya Janata party was elected for a third consecutive term last month, albeit with a weakened mandate after losing its majority and being forced into a coalition government.
Goyal called the Indian result a “big victory” for the BJP and said the government had “come back with a renewed vision and passion to do much more”. India is also pursuing trade agreement talks with the EU.
“India is looking for far greater openness, India is looking to improve and strengthen our regulatory practices and ease of doing business to bring in more stability in policy, more predictability and continuity,” he said.
“We’re very committed to greater investments and greater trade with the world as long as it is on fair terms on both sides.”
