The trade deal talks between India and the UK have run into a deadlock with both sides hardening their stands amid elections scheduled in both the countries.
The UK has alleged that India was pushing for a watered-down trade deal as time runs out to conclude an agreement before negotiations are suspended for Indian election campaigning in the coming weeks, reports The Times quoting senior British officials.
The officials explained the terms being offered by the negotiating team fell significantly short of what ministers would accept and did not represent meaningful new access to Indian markets.
A Whitehall source told the daily that the UK is “not prepared to sign up to something that is basically worthless.”
The UK Government feels India is putting pressure by citing the recent meeting the opposition Labour’s shadow foreign and business secretaries David Lammy and Jonathan Reynolds respectively had with Indian commerce minister Piyush Goyal.
However, Reynolds told the Financial Times that the claim was “ridiculous” and that he had not been engaged in any “shadow negotiation” during his talks with the Indian commerce minister.
While the Indian side claims that the deal was close, the UK government claims there has been “no meaningful progress” despite continuous talks between British and Indian teams since the new year, and feel that the two prime ministers, Rishi Sunak and Narendra Modi, will have to intervene to break the deadlock.
The UK is pushing for India to significantly reduce tariffs on UK exports such as food, cars, and whisky that are currently as high as 150 per cent and is seeking greater access for British firms providing services such as accountancy, architecture and technology.
New Delhi is seeking relief for Indian workers seconded to the UK on business visas being made to pay national insurance, despite not being eligible for UK pensions or social security benefits. It wants Britian to enter into a social security agreement that it had earlier signed with Canada, France and Australia.
As many as 50,000 Indians a year are granted skilled worker visas by the UK. Moore Kingston Smith, which works closely with Indian clients, estimates that there were about 22,000 new Indian nationals on secondment to Britain last year and that a social security deal could cost the UK exchequer roughly £200 million, reports Financial Times.
India is also looking for a binding commitment that Indian students will be allowed to stay in the UK for two years after they have graduated. This is something that goes against the Tory concerns over migration.
With elections due in India by May and in the UK by the end of the year, both sides accept that there is little time to resolve sticking points.
The trade pact, if reached, would be one of the most significant for the UK since it left the EU.
Damian Talbot