The landslide victory of the Labour Party in the UK has stirred speculation about the future of the stalled trade talks with India under the Keir Starmer’s government.
Some experts said there was no need for undue concern over the scope, prospects and timing of the trade deal.
However, others argue that immediate negotiations are necessary to address issues such as granting temporary visas in the services sector and any carbon tax on Indian imports.
"The Labour government should continue the Conservative government’s policy of close economic engagement with India," said Biswajit Dhar, distinguished professor at the Council for Social Development.
"The Labour Party emphasised in its manifesto a new strategic partnership with India, including a free trade agreement. They also spoke of deepening cooperation in areas such as security, education, technology and climate change."
Despite this, Labour's strict stance on immigration and tough position on energy transition could present challenges. Dhar expects both governments to co-operate to overcome these significant issues.
Ajay Sahai, director-general and CEO of the Federation of Indian Export Organisations (FIEO), stated: "There is no reason to be apprehensive. The manifesto references a significant tariff reduction on Scotch whisky through free trade agreement discussions, and we hope that the tariff reductions meet expectations. Additionally, there may be minor adjustments in visas for professionals."
Arpita Mukherjee of the Indian Council for Research on International Economic Relations (ICRIER) said: "While many issues have been agreed upon, sensitive issues remain. Both sides must understand each other's sensitivities to close a deal, bringing in regulatory cooperation and multi-stakeholder dialogue."
The UK’s insistence on lowering tariffs remains a sticking point.
Additionally, the UK's immigration policies concerning Indian service sector workers continue to challenge negotiations.
India has raised concerns about proposed UK regulations, such as the carbon tax similar to the EU's carbon border adjustment mechanism, which could undermine tariff concessions.
