A free trade deal between the UK and India could be signed this year, as contentious issues have been tackled, a senior Indian trade ministry official said on Friday.
Both countries have reached consensus on the broad contours of the deal, Commerce Secretary Sunil Barthwal said on Friday.
“We want to finalise the deal at the earliest,” he added.
The British and Indian prime ministers, Rishi Sunak and Narendra Modi, met in April and agreed to expedite negotiations for the UK-India Free Trade Agreement.
For the UK, a deal with India is part of its search for diversified global trade relationships after its 2020 exit from the EU and comes after it confirmed it would join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership.
For India, a deal with the UK would be its first with a developed country after signing an interim trade pact with Australia last year – and a step on the road to becoming a bigger exporter.
Mr Barthwal said the deal could be signed “much before” the end of the year but he added: “Nothing is final till everything is final.”
The 11th round of talks concluded recently in London during a visit by Mr Barthwal and Commerce and Industry Minister Piyush Goyal.
Out of the 26 chapters in the draft agreement, discussions on 19 have been closed including issues related to the auto sector, Mr Barthwal said.
An agreement in principle has been reached on the issue of rules of investment but details are still being worked out by customs authorities in both countries, Mr Barthwal said.
However, the countries have yet to iron out differences on intellectual property rights, rules of origin and an investment treaty, separate trade ministry sources said.
India is pushing for a “zero tariff” for textile, leather and other labour-intensive manufacturing sectors while Britain had sought tariff concessions in other areas, Mr Barthwal added.
A representative for Britain's Department for Business and Trade said: “While we’ve made good progress in closing chapters, we’re now focused on the high ambition areas including goods, services and investment.
“We are clear that we will only sign when we have a deal that is fair, balanced and ultimately in the best interests of the British people and the economy.”
Domestically, Mr Modi is trying to promote a business-friendly image ahead of national elections early next year.
Bilateral trade between India and the UK rose 16.6 per cent year-on-year to $20.42 billion in the 2022/23 fiscal year ending in March.
The 2030 UK-India Road Map, announced in 2021, commits both nations to deeper co-operation on health, climate, trade, education, science and technology, and defence.
