UK Parliament panel warns against rushing FTA with India to meet Diwali deadline

London: A British parliamentary panel on Friday July 22 warned the government against agreeing to a ‘bad’ deal to rush things just to meet the Diwali deadline set for a free trade deal. – historical exchange (FTA) with India.

The House of Commons International Agreements Committee, in a report entitled UK-India Free Trade Agreement: A Review of the Government’s Negotiating Objectives, questions the Diwali deadline set for the conclusion of negotiations by outgoing Prime Minister Boris Johnson during his visit to India in April.

The committee warned that this could risk sacrificing a good deal for a fast one, setting a temporal ambition beyond the content.

“A growing economy, along with a growing middle class and consumer market, makes India an attractive trading partner for the UK. The UK government, however, must not agree to a bad deal just to meet a deadline,” said Baroness Dianne Hayter, chair of the commission.

“We have noted that the aspirations of the Negotiating Goals are particularly challenging as some would require changes in India’s cultural and legal approach, which are unlikely to be achieved or would take a long time,” he said. she declared.

“We reiterate our recommendation to the government to publish a trade policy, showing how trade relates to broader foreign policy, security, defense and other national objectives, as well as labour, people’s rights. gender, and the environment. This will help understand trade policy in relation to other priorities and allow us to assess the impacts and trade-offs,” she said.

The all-party committee says India’s historically protectionist policies, different regulatory approaches and trade practices would mean changes in national legislation, which could be a long process to implement.

He also refers to the practice in India of requiring companies to make so-called facilitation payments, different administrative requirements at national and state levels, a lengthy business license application process, a complex tax regime, low levels of contract enforcement and limited intellectual property protections.

The committee therefore questions the arbitrary Diwali deadline set for the conclusion of the negotiations, warning that the government could risk giving up a good deal for a quick one by setting a temporal ambition beyond the content, he said. .

The committee notes that although the government under Boris Johnson has stressed that it intends to reach a comprehensive agreement, it is unclear how comprehensive this agreement can be given the regulatory and commercial environment. difficult from India.

Because government targets do not take sufficient account of the Indian context, they may appear overly ambitious or unrealistic, with some (for example on public procurement) appearing particularly unattainable, the report warns.

The committee called on the government to publish a comprehensive trade policy that provides a framework within which all negotiations can be conducted.

This is now expected to resume after Parliament returns from its summer recess in September, by which time the UK is expected to have a new Prime Minister, either former Chancellor Rishi Sunak or Foreign Secretary Liz Truss.

While trade experts have indicated that the ambition of a UK-India FTA is unlikely to be affected by the leadership change in Downing Street, the Diwali deadline for its completion has raised a question mark.

“I would much rather have a more comprehensive deal that takes a bit longer to complete. It’s good to have a deadline, it’s good to have that goal to try and get Diwali done. But it doesn’t may not be the end of October but the end of December; my target is the end of this year,” said the chairman of the Confederation of British Industry, Lord Karan Bilimoria, who leads the UK and India Task Force on the industry as a joint commission to strengthen cross-industry collaboration on ongoing trade negotiations.


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