India-UK FTA Talks Back In Focus As Rishi Sunak Takes Over As UK PM


Rishi Sunak as UK prime minister has brought back into focus the UK-India free trade agreement that had fallen by the wayside amid a political crisis in the United Kingdom.

Negotiations for the landmark trade deal were to be concluded by Diwali.

Sunak, during his time as the UK Chancellor, had on the record expressed his commitment to the India-UK FTA, flagging financial services as a “particularly exciting” aspect of the bilateral trade relationship.

“I’m very supportive of India playing an increasingly influential role in the region and, indeed, in the world as a massive economy and the world’s largest democracy,” Sunak had said in July. “An FTA would prove a greater champion of that cause.”

The City of London Corporation, the financial hub of the UK capital, has expressed the hope that Sunak’s focus on services would take the FTA in the right direction.

“An India trade deal could be one of the most ambitious and commercially meaningful deals to the UK,” said Chris Hayward, policy chairman at the City of London Corporation. “With negotiations going beyond Diwali, this presents us with an opportunity to prioritise the content of the deal. And we hope the new prime minister will provide a fresh impetus in securing a deal.”

“Services make up around 70% of annual trade between our countries. So, a deal that doesn’t deliver for this sector would be a missed opportunity.”

“Firms will be keen to see the agreement focus on enabling smoother digital trade, free flow of data and make it easier for people to work and live in each other’s countries,” Hayward said. “This will ultimately bring significant benefits to both consumers and businesses across UK and India.”

Still, there are challenges.

“Rishi Sunak is yet to be tested on foreign policy and defence issues,” said Rahul Roy-Chaudhury, senior fellow for South Asia at the International Institute for Strategic Studies thinktank in London.

“Having been born in the UK with parents originating from East Africa, Rishi Sunak has not been a public advocate of strong ties with India during his parliamentary and ministerial stints,” Roy-Chaudhury said. “Indeed, as chancellor for over two years, he did not visit India even once. There is no indication that this outlook is likely to change as prime minister when he needs to focus on a much larger foreign and security canvas.”

But Sunak’s commitment to achieve a partnership of equals between India and the UK with two-way flow of talent is expected to distance the British government from former Home Secretary Suella Braverman’s statements on Indians as the largest group of visa overstayers.

That had pushed the FTA negotiations further off track.

“The UK doesn’t have a monopoly on opportunity. There’s an enormous amount of opportunity in India, we also want to make sure that if this living bridge is going to be a real thing, we have got to make it easier for people in the UK to go to India, to study at world-class institutions to go work in all these amazing startups,” Sunak had said when he was the UK chancellor.

The National Indian Students and Alumni Union UK has called upon Sunak to be the prime minister who addresses a long-standing issue and removes international students from being counted as part of the migration figures.

“I hope that Rishi as prime minister will champion the skills and knowledge exchange critical to the growth of both our countries and not bow down to noise on immigration from the far right,” NISAU UK Chair Sanam Arora said. “I sincerely hope Rishi also recognises bizarre situation of counting international students as migrants, and we call on him to be the prime minister who changes this — a move that can be transformative for the British economy and the higher education sector,” she said.


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