Why it could be a little hard for India to clinch favourable free trade pacts with UK, European Union
British Parliament that both sides had already closed the majority of chapters, but added that his country would accept only a “fair and reciprocal” trade deal.
A year later, hard negotiations are still continuing. UK PM Rishi Sunak said last month that there was progress in talks but he “won’t rush” into a deal.
From New Delhi’s perspective, this is in sharp contrast to what it accomplished last year — a trade deal with the United Arab Emirates inked only after 88 days of negotiations.
Free Trade Agreements (FTAs), or treaties between two or more nations designed to reduce barriers to trade and investment, are not new to India. New Delhi has signed 13 such pacts in the last five decades, with the primary ones being with countries and blocs in the east — for instance Japan, South Korea, Australia, and the Association of Southeast Asian Nations.
In 2019, New Delhi opted out of the Regional Comprehensive Economic Partnership at the last moment, mainly due to concerns over China’s undue benefits out of the proposed pact.
With India now looking westward, negotiating to clinch favourable deals with big economies such as the UK, the US and the European Union, it’s becoming clear that part of this new journey could be bumpy. These economies are willing to ink deals with India, recognising the country’s big market and high growth in output, but simultaneously want New Delhi to cede ground on newer areas from environment to digital trade.
New Delhi is also negotiating a trade agreement with Israel, believed to be more for strategic reasons, and until last month, it was also engaged with Canada.
