India-UK free trade deal talks deadlocked over data: report

Data localization and the fact that British companies are allowed to bid for contracts with the Indian government are among the issues likely to cause a stalemate in the final stages of negotiations for the free trade agreement (FTA) between India. India and UK set for Diwali project completion deadline, according to a UK media report. on Sunday.

‘The Daily Telegraph’ quoted a source close to the talks to say that the data localization rules which prevent foreign companies from taking data out of India and allow UK companies to bid for public sector contracts are two ” key sticking points for a global agreement.

The likelihood of a so-called “thin” trade deal within the symbolic Diwali or Oct. 24 deadline and other iterative deals at a later stage now appears to be a likely outcome.

“The stumbling blocks are absolutely digital. The ambition and completeness of this deal is kind of time-dependent,” the newspaper quoted an “insider” as saying.

This follows UK Trade Secretary Kemi Badenoch indicating earlier this week that just because there might be an FTA with India agreed, ‘we can’t do even more later’.

The Department for International Trade (DIT) has also reiterated the Government’s position that any FTA will only be entered into if it meets UK interests.

“We remain clear that we will not sacrifice quality for speed and will only sign when we have a deal that meets UK interests,” a UK government spokesman said this week.

It follows a week of contentious interventions that cast a shadow over the prospect of a far-reaching bilateral trade deal, with UK Home Secretary Suella Braverman expressing reservations about the offer to India of a kind of open border visa concessions.

While India has countered the minister’s claims that a Migration and Mobility Partnership (MMP) between the two countries has not “worked very well” to tackle visa overstays, strategic experts have suggested that the feuds may well end in a diluted trade pact. The prospect of Prime Minister Narendra Modi visiting the UK later this month to sign a draft FTA around Diwali is also seen as fragile at this stage.

“It now seems likely that the future FTA between the UK and India under the government of Liz Truss will not be as substantial or as comprehensive as envisaged by the previous government of Boris Johnson, as negotiations on key issues of mobility/migration and tariffs are expected to continue toward an open-ended second phase of the agreement, said Rahul Roy-Chaudhury, senior South Asia researcher at the International Institute for Development think tank. Strategic Studies (IISS) based in London.

“Negotiations on the key issues of mobility/migration and tariffs can be expected to continue into an open-ended second phase of the agreement. But it will still allow both governments to claim victory political, even if its economic impact may be disappointing for both, he says.

The Diwali timetable for an FTA was announced enthusiastically by former Prime Minister Johnson during his visit to India in April. The UK’s ruling Conservative Party has since been thrown into turmoil and its embattled successor in Downing Street, Liz Truss, is said to be very keen to score her big win by striking a trade deal with one of the world’s fastest growing economies. fastest in the world. which she had initiated as a former Secretary of Commerce.

The objective of the FTA negotiations is to reduce barriers to trade, reduce tariffs and facilitate imports and exports to each other’s markets.

According to official UK government data, two-way trade between India and the UK currently stands at around £24.3 billion a year and the aim is for it to at least double by 2030.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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