Jul 05, 2024 05:33 PM IST
Labour Party’s leader Keir Starmer’s election manifesto includes plans for FTA with India, stressing shared values and strategic partnership.
Keir Starmer officially became the UK’s new prime minister after his Labour Party secured a landslide victory in Thursday’s parliamentary elections, defeating incumbent Rishi Sunak’s Conservative Party. How will Labour Party’s leader elevation affect the ongoing talk of FTA?
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How UK-India FTA works?
The India-UK Free Trade Agreement (FTA) negotiations, which began in January 2022, aim to enhance economic ties by providing access to India’s large and growing market, bypassing high tariff barriers. The agreement covers 26 chapters, including goods, services, investments, and intellectual property rights.
Bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from USD 20.36 billion in 2022-23. Starmer’s leadership could impact ongoing FTA discussions.
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What is Keir Starmer’s view on FTA with India?
Keir Starmer’s stance on an FTA with India is articulated in Labour’s 2024 election manifesto, which outlines plans for forging a “new strategic partnership with India, including a free trade agreement, as well as deepening cooperation in security, education, technology, and climate change.”
Addressing the India Global Forum (IGF) last year, Starmer said his vision for a revamped Labour Party is to pass FTA.
“What my Labour government will seek with India is a relationship based on our shared values of democracy and aspiration. That will seek a free trade agreement (FTA), we share that ambition, but also a new strategic partnership for global security, climate security, economic security,” he said.
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How Starmer elevation affects India-UK FTA?
The Global Trade Research Initiative (GTRI) founder Ajay Srivastava is hopeful that the Labour Party will recognise the UK’s potential to benefit from an FTA with India, boosting exports due to significant cost advantages.
“For the proof, it can look at the historical precedents, such as the steady improvement in ASEAN, Japanese, and South Korean exports to India following their respective FTAs with India,” he said adding as the Labour Party takes charge, it may approve the FTA with minor adjustments.
He added that the agreement is nearly finalised, and with a few minor adjustments like curtailing the number of visas for Indian professionals, the Labour Party may likely give its approval.
“This could set the stage for the agreement to be signed as early as October this year,” Srivastava said.
(Inputs from PTI)
