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UK FTA: Proceed with care

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It is encouraging to note that the BJP-led government is not trying to conclude the negotiations for the India-UK Free Trade Agreement (FTA) in a hurry, before the general elections.

If the negotiations have dragged on despite both sides expressing hopes of its conclusion since the Diwali of 2022, it is in some measure due to UK’s aggressive stand in certain key areas.

These much talked about areas of UK’s interest include greater market access for Scotch and automobiles (including EVs), liberalisation of legal services and financial services such as banking and insurance, strict Intellectual Property Rights (IPRs) benefiting pharma biggies and lenient Rules of Origin to allow UK companies to continue to benefit from its supply chains integrated with the EU.

India has its own interests to protect in most areas where the UK is aggressively pushing its agenda, and is not prepared to make offers beyond its level of comfort.

The BJP government has correctly realised that giving in to all demands made by the UK in sensitive sectors just before the elections in order to seal the deal could only be detrimental.

Due to increased scrutiny from all quarters just before the elections, the risk of the criticism for giving in to pressure may easily outweigh the plaudits for signing the pact.

Confident of being in power for another term, some representatives of the BJP government expressed hopes that if the India-UK FTA negotiations fail to conclude now, it could be continued later.

It remains to be seen whether India is able to continue resisting pressure and avoid an unequal pact favouring the partner country.

After all, a no deal is any day better than a bad deal.

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