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india uk trade deal: Biggest India trade deal with the UK stuck on free access to skilled workers

Talks between India and the UK have hit a snag over easier access to thousands of skilled workers from the South Asian nation that is likely to push finalizing a free trade agreement beyond the October deadline.

New Delhi’s position has hardened in the ongoing negotiations amid concerns raised by UK Home Secretary Suella Braverman on migration from India. The comments made last week prompted India to say both the nations should “honor” the “understanding” with regards to migration mobility.

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The deal, when clinched, would be India’s biggest and most ambitious free trade agreement. New Delhi is also seeking to claw back half a billion pounds in payments made by Indian workers toward Britain’s social security system as part of the deal, people familiar with the matter said. Further, UK’s offer to restrict movement of skilled workers would skew the proposed trade deal in favor of Britain and wouldn’t be a win-win for both nations, the people said.

The UK government will not “sacrifice quality for speed, and will only sign when we have a deal that meets both countries’ interests,” said a spokesperson for the Department for International Trade.

“We have a close, positive working relationship with India and a thriving trade partnership worth £24 billion in 2021. We continue to seek improvements to our current trading relationship. This is why we are negotiating a high-ambition Free Trade Agreement,” the spokesperson added.

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India’s trade ministry did not respond to an email seeking comment.Britain and India launched negotiations for a free trade agreement in January with an aim to conclude the talks by end of October this year. But that deadline is set to be missed given the lack of consensus, the people said asking not to be identified as the discussions aren’t public.The deal would also act as a springboard for India — which recently overtook the UK to become the world’s fifth-largest economy — to seek an FTA with the EU, which along with the US, is a major export destination.


Other Hurdles As the deadline for the conclusion of talks nears, India too is yet to agree to issues critical to the UK including lowering import duties on automobiles and Scotch whisky — one of Britain’s major demands — as Prime Minister Narendra Modi’s government awaits headway on the skilled workers’ mobility.

Other issues holding up the negotiations include the UK’s insistence on getting exemption from rules on data localization which impact sectors such as financial services and greater access to India’s government contracts. India has expressed its inability to relax the data localization rules due to domestic laws, the people said.

Both the sides envisage the deal to double the trade by 2030. The total trade between India and the UK stood at over $17 billion in 2021-22, according to Indian government data.

ET Online

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