India and the United Kingdom are likely to sign a free trade agreement (FTA) in the last week of October as they aim to increase bilateral “annual business,” Indian media outlet the Economic Times reported on Wednesday.
India has invited UK prime minister Rishi Sunak to visit the country on October 28 to “finalize the pact,” according to the outlet, adding that the proposed agreement would comprise 26 chapters.
Earlier, Business Standard reported that officials on both sides were working to address “contentious issues” related to the agreement, given that plans were underway to conclude the deal within this year.
An agreement could be signed during Sunak’s upcoming visit to India if the “negotiations conclude by then,” a source familiar with the matter told the outlet.
India and the UK have already concluded 13 rounds of negotiations and a team led by Indian Commerce Secretary Sunil Barthwal was in London recently to give impetus to the talks, PTI reported on Sunday. Bilateral trade between the two countries has seen an uptick in recent years – it increased to USD 20.36 billion in 2022-23 from USD 17.5 billion in 2021-22 – and the signing of the FTA is expected to further accelerate this growth in trade and commerce.
An FTA with the UK is high on India’s list of agendas in the lead-up to the general elections next year, which will determine the next Indian prime minister. For the UK, an FTA with India is crucial amid its continuing efforts to bolster the economy following Brexit. Notably, India is the largest country that the UK has committed to signing an FTA with.
Still, there remains a big question among analysts about how the UK’s role in the ongoing diplomatic spat between India and Canada may damage the talks. New Delhi wanted a free trade agreement with Ottawa as well, but the discussion was paused in September.
The UK, along with the US, Australia, and New Zealand, reportedly provided Ottawa, their partner in the ‘Five Eyes’ intelligence-sharing alliance, with data regarding the killing of a prominent Sikh activist Hardeep Singh Nijjar. In September, Canadian Prime Minister Justin Trudeau said his country had credible intelligence linking “agents of the Indian government” to the killing of Nijjar, who had been designated as a “terrorist” by New Delhi. India has strongly rejected Canada’s allegations, calling them “absurd and motivated.”