NEW DELHI: As the new UK govt gets back to the negotiating table on Monday, duty cuts on scotch and cars will back on the table, amid indications that Indian industry has given more elbow room on whisky, with India going to press for easier visas for businessmen and professionals under the proposed free trade agreement.
The pact that has been in the works for the last few years and was moving at a fast pace during Boris Johnson’s tenure, before getting caught in the slow lane due to political uncertainty, with the Rishi Sunak govt showing reluctance on pushing ahead with it. After deliberating for months, the Keir Starmer govt, that took charge last July has now come back for talks, with UK’s secretary of state for business and trade Jonathan Reynolds leading the delegation.
His talks with commerce and industry minister Piyush Goyal will set the tone for the talks, amid indications that both sides are keen to move forward.
Both sides are likely to set an ambitious target if the deal goes through. Given the global trade uncertainty in the wake of geo-political tensions and Trump’s aggressive stance, bilateral trade deals can help push exports for both trading partners.
Whenever talks have come to a halt, whether it was 2012 (when the UK was still part of the European Union) or in 2023, the issue at the centre of discussions has been the reluctance to provide more visas to Indian businesses and duty cuts by New Delhi for products of interest to the UK, or the EU.
For the UK, Scotch is a key area of interest and with India offering concessions to Australia under ECTA, and slashing duties in bourbon for the US ahead of PM Narendra Modi’s meeting with American president Donald Trump earlier this month, there is an indication that the bar has been lowered – provided the British negotiators can do a good trade off.
The Indian industry has also shown greater flexibility by indicating its support for a lower import price. But it is keen that there is more flow through the bulk route, instead of bottled at origin, so that there is business and employment in India. In return, it wants the UK also to treat Indian spirits in a fair manner. Besides, the domestic industry wants safeguards to ensure that Scotch and alcohol from other European countries do not make their way into India, routed via the UK.
For India, business visas are going to be a key demand, especially with govt keen to wrap up ongoing negotiations to boost exports, particularly of labour intensive products, such as textiles, at a time when industry in Bangladesh is going through a rough phase.
A duty cut in the UK will help Indian garments keep more favourably with those going from Bangladesh.
