Thu, 27 Oct 2022 10:09 PM IST
PRIME Minister Narendra Modi on Thursday spoke to new British PM Rishi Sunak, who expressed his excitement to work with India. In their first conversation since Sunak assumed charge as British prime minister on Tuesday, the two leaders agreed on the need to expedite the free trade agreement (FTA) between India and the UK.
Both PM Modi and were in consensus on the importance of early conclusion of a comprehensive and balanced free trade agreement, earlier scheduled to be finalised by Diwali.
Following the conversation, Sunak said he was excited about what the two "great democracies" could achieve as they work to deepen their ties.
PM Modi tweeted, "Glad to speak to Rishi Sunak today. Congratulated him on assuming charge as UK PM. We will work together to further strengthen our Comprehensive Strategic Partnership. We also agreed on the importance of early conclusion of a comprehensive and balanced FTA."
Responding to PM Modi, Sunak said, "Thank you Prime Minister Narendra Modi for your kind words as I get started in my new role. The UK and India share so much. I'm excited about what our two great democracies can achieve as we deepen our security, defence and economic partnership in the months & years ahead."
The 42-year-old British PM is the youngest British prime minister in 210 years. An investment banker-turned politician, he is also Britain's first Hindu Prime Minister.
India-UK Trade Deal
In January this year, India and Britain had begun negotiations for the free-trade agreement (FTA) with an aim to conclude talks by Diwali. However, the deadline was missed as differences crept up between the two sides and due to a lack of consensus on issues.
The focus of the FTA negotiations is on reducing the barriers to trade, cutting tariffs, and supporting easier imports and exports into each other's markets. But the negotiations reached a stalemate in the final stages.
As the then Chancellor of the Exchequer, Sunak had supported the FTA, under which as he saw enormous opportunities for both countries in the fintech and insurance sectors.
Why The Delay In Signing FTA
There have been two prominent reasons holding back the two sides from signing the deal. While one is a diplomatic discord over the issue of immigration, the other is a conflict over data sharing rules.
India was reportedly miffed with Britain after its UK Home Secretary Suella Braverman expressed "reservations" over India being offered some sort of "open borders" visa concessions. The Indian-origin UK minister had said "the largest group of people who overstay are Indian migrants". The remarks riled up India to the extent where they cast a shadow over the prospect of a wide-ranging bilateral trade agreement.
According to observers, there were rising chances of a diluted or a "thin" trade deal, instead of a comprehensive one.
Further, there has been disagreement over data localisation rules and UK companies being allowed to bid for Indian government contracts. The data localisation rules prevent foreign companies from taking data out of India.