2 min read . 21 Oct 2022 Sanchari Ghosh
SYNOPSIS Liz Truss had started working on the deal as international trade secretary and had laid the groundwork for it back in January 2022.
Britain’s third female Prime Minister Liz Truss, who has laid the foundation for the much talked about India-UK free trade agreement (FTA), will walk out of 10 Downing Street in London without cherishing it as a prize under her belt. Truss has always been extremely vocal about her support for India and while the FTA was still taking a shape, she had commented that the two countries are in a “sweet spot of the trade dynamics that are building up”. The question now rises, what will happen to the India-UK trade deal after she leaves office?
What is the India-UK trade deal?
An FTA deal reduces or eliminates import-export tariffs between two countries. If the deal works between India and the UK, it would significantly reduce customs duties on the maximum number of goods traded between them and also ease norms for promoting investments and services trade.
Truss had started working on the deal as international trade secretary and had already laid the groundwork for it back in January 2022.
“We are looking at a comprehensive trade agreement that covers everything, from financial services to legal services to digital and data, as well as goods and agriculture. We think there is a strong possibility for us to get an early agreement, where we lower tariffs on both sides and start to see more goods flowing between our two countries,” she had said soon after signing the ETP.Both Truss and India Foreign Ministry hoped to crack a deal before Diwali.How did the deal hit a roadblock? The deal witnessed a setback when then UK Home Secretary Suella Braverman in an interview talked about “reservations” over the proposed Free Trade Agreement (FTA) with India and linked it to illegal immigration.
The comments created tensions between the two countries. Following this, Ministry of External Affairs (MEA) pointed out India and UK are interested to conclude the FTA at the earliest as intensive discussions are underway keeping in view that it proves to be a win-win situation for both sides. “Going forward, this will require mutual implementation of these understandings,” MEA spokesperson Arindam Bagchi had said.
What will happen to the bill after Truss is gone?
Commerce Minister Piyush Goyal assured that free trade agreements with the UK are well on track and India will wait for the change in leadership before formulating a strategy vis a vis the UK.
“We will have to wait and see whether they have a quick change of leadership. Let’s see who comes into the government and what their views are. It’s only after that we’ll be able to formulate a strategy vis a vis the UK,” said Minister Goyal on the free trade deal with the UK after UK Prime Minister Liz Truss resigned.
However, the deal is unlikely to be signed before 2023.
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