Change at 10, Downing Street renews hope of FTA movement

NEW DELHI: Keir Starmer's election as the next British Prime Minister has renewed hopes of movement on the proposed free trade agreement, where negotiations moved slowly during Rishi Sunak's term, with the Indian side also hoping that his presence in 10, Downing Street will be a buffer against extremist elements who have been engaged in anti-India propaganda.
India's relations with the Labour Party suffered a major blow in 2019 after the latter, under its previous leader Jeremy Corbyn, called for self-determination for Kashmiris and also demanded that international observers be allowed to enter the Union Territory, after India revoked J&K's special status. Starmer, however, corrected course by reaffirming commitment to the UK's official position that J&K is a bilateral issue.
"Any constitutional issues in India are a matter for the Indian Parliament, and Kashmir is a bilateral issue for India and Pakistan to resolve peacefully," Starmer later said, participating in a meeting with Labour Friends of India.
Reaching out to the Indian diaspora, with whom he wants to rebuild Labour's relations, Starmer has also assured them there's no place for Hinduphobia in the UK. As a part of his outreach, he has joined Diwali and Holi celebrations in London.
"The current leadership has moved ahead but it needs to be seen if those who espoused the cause of extremists were those at the fringe and how they are reined in," said Yash Sinha, India's former high commissioner to the UK.
After the rift, there are signs of improved ties with the Indian govt remaining in touch with Labour leaders in the run-up to the elections, with the most significant meeting taking place between external affairs minister S Jaishankar and Starmer when the former visited UK in November. Jaishankar said after the meeting that India valued the bipartisan commitment in the UK towards strengthening the relationship.
Given Labour's manifesto and the emphasis on security, Sinha also expects greater cooperation on defence, cyber security and the need to keep the Indo-Pacific free and open.
"The initial focus will be on domestic issues but when it comes to foreign policy, India will be right on top," the diplomat said. And the FTA - where 14 rounds of talks have been held so far with some ticklish issues still on the table - will be a major thrust.
"We will seek a new strategic partnership with India, including a free trade agreement, as well as deepening cooperation in areas like security, education, technology and climate change," Starmer's party said in the manifesto.
But trade experts see a tweak in the UK's negotiating strategy with business visas, social security and steeper cuts in import duty on Scotch being the focus of talks.
Tariff cuts on cars and whisky are two issues on which India has not relented and is pressing hard for business visas and permits to allow more software professionals, doctors and nurses to work in the UK.
"The Labour Party manifesto focuses on FTA with India and actually wants to expand the FTA to include other areas of cooperation such as new technologies, environment and security. Therefore, there is no reason to be apprehensive on this front. However, under the Scotland section, the party manifesto has references to working to achieve a significant tariff reduction in India through FTA, we hope that the proposed tariff reductions on Scotch meets their expectations. Moreover, there may be some minor tweaking in visas to professionals as well," said Ajay Sahai, director general at Fieo, which represents exports.
India is hoping to get lower duty access for its garments and footwear, hoping to compete more favourably with competition from Bangladesh, which enjoys a massive tariff advantage due to its least developed country status.
"There are two areas on which we need to keep a watch in the talks: one is the Labour Party's approach on social security. We expect a thrust on fintech and investment should intensify," said Sachin Chaturvedi, director general at think tank Research and Information System for Developing Countries.