A British parliamentary group has warned the Indian government not to agree to a “poor” deal in order to rush the Diwali deadline set for the conclusion of a landmark free trade agreement (FTA) with India.
The Committee on International Agreements of the House of Commons, in a report entitled “UK-India free trade agreement: Scrutiny of the Government’s Negotiating Objectives”, questions the Diwali deadline set for the conclusion of the negotiations by the outgoing Prime Minister, Boris Johnson, during his visit to India in April.
The multi-party commission says that India’s historically protectionist policies, different regulatory approaches and business practices would imply changes in national legislation, the implementation of which could be a lengthy process.
It also refers to India’s practice of requiring so-called facilitation payments from companies, different administrative requirements at the national and state levels, a lengthy business permit application process, a complex tax regime, low levels of compliance with contracts and limited intellectual property protection.
Therefore, the parliamentary commission questions the arbitrary deadline of Diwali set for the conclusion of the negotiations, and warns that the Government could risk giving up a good agreement for a quick one by setting an ambition of time above the content, it says.
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The parliamentary committee notes that while the Boris Johnson government has insisted on its intention to conclude a comprehensive deal, it is unclear to what extent this can be done, given India’s difficult regulatory and business environment.
Because the government’s targets do not sufficiently take into account the Indian context, they may appear overly ambitious or unrealistic, with some (for example, those relating to public procurement) appearing particularly unattainable, the report warns.
The commission has asked the government to publish a comprehensive trade policy that provides a framework within which all negotiations can take place.
Multi-party commission says India’s historically protectionist policies, differing regulatory approaches and business practices would mean changes to domestic law
This issue is expected to be taken up after Parliament returns from its summer recess in September, at which point the UK is expected to have a new Prime Minister, either former Chancellor Rishi Sunak or Foreign Secretary Liz Truss.
Although trade experts have indicated that the ambition of a UK-India FTA is unlikely to be affected by the change in leadership at Downing Street, the Diwali deadline for its completion has been a question mark.
“I would prefer to have a broader deal that would take a little longer to complete. It’s good to have a deadline, it’s good to have that goal to try to finish before Diwali. But it may not be the end of October, but the end of December; my target is the end of this year,” said recently the chairman of the Confederation of British Industry, Lord Karan Bilimoria, who heads the UK-India Industry Task Force as a joint commission to improve cross-industry collaboration in the ongoing trade negotiations.
Article republished from The Wire as part of an agreement between both parties to share content. Link to original article:https://thewire.in/trade/uk-parliament-panel-warns-against-rushing-fta-with-india-to-meet-diwali-deadline