The United Kingdom is a sinking economy still masquerading as a great power. After the chaos of Brexit and the rapid exits of four prime ministers, the UK is desperate for a win. So, Prime Minister Rishi Sunak is betting on India.
Sunak wants a trade deal. He has been pursuing it since he took office, but a deal continues to elude him. Formal negotiations began in 2022, two years have passed, and yet, an agreement is not in sight. Instead of a deal, the negotiators keep coming up with new deadlines.
It has become a game of cat and mouse. Whenever the world thinks both sides are close, the goalpost is shifted. Sunak keeps missing opportunities. He visited India last year for the G20 summit. Observers were hoping for a breakthrough, but the deal did not happen.
A new deadline was set, which was by the end of 2023—around Diwali last year. Diwali is the biggest Hindu festival, so the choice was obviously symbolic. Apparently, Sunak wanted to travel to India to sign the trade deal and catch the India vs England cricket match. India hosted the World Cup last year. So Sunak would have had the perfect stage to take a victory lap, but he missed it. The negotiators failed to deliver again.
A new deadline was set, which is March 2024. Just before the Indian general elections. Time is running out for Rishi Sunak. Once the elections are announced in India, the trade deal will take a backseat, so Sunak is under pressure. The onus is on him to get the deal done. But why only him? It is because India is not in a hurry. London needs this deal more than New Delhi.
The idea of the trade deal is not new or recent, for that matter. When the UK left the European Union, the conservatives turned to India. They promised a mega trade deal. One that would unlock the benefits of Brexit. Theresa May visited India; she was the first UK Prime Minister to pursue this. But she got off on the wrong foot. During her visit, she lectured India on immigration. She told New Delhi to take back immigrants if it wants more visas.
Needless to say, India did not respond to any overtures after that; May’s successor was Boris Johnson. He adopted a different tone. He promised a deal by Diwali 2022. But he couldn’t get it done. Then came Liz Truss; she was barely 45 days into the job, and the task fell to Rishi Sunak. But he, too, is struggling.
Now, for a moment, let’s forget about the politicians and think about the potential deal. What does India stand to gain? What is at the centre of every free trade agreement? Goods?! In this case, London wants lower tariffs for its key exports, stuff like cars, Scotch whisky, and wines. But does the Indian economy depend on these goods? It doesn’t.
India has many alternatives, or arguably better sources, to buy from. Many of its exports already enjoy low or zero tariffs, according to a report.
India’s exports to the UK include things like medicines, diamonds, and machine parts. They face no tariffs in the UK. So technically, India doesn’t even need a trade pact. It can manage without it. There are no substantial benefits to unlock.
But what India wants are the visas. Will the UK open up to taking more Indian talent? It will not, and that’s a problem! Any good trade deal allows for the free movement of people, but as far as London is concerned, that’s not on the table. In fact, it is making it harder for Indians to stay in the UK.
Just this week, London changed some rules; students in the UK can no longer get visas for their dependents. So why should India care about a trade deal with the UK? Even trade experts in the UK have said the same. They say:
“India negotiates as if it is a country with one billion people, which it is.”
“In the UK discourse, it is the big UK negotiating with little India. But India is on course to be one of the biggest economies in the world, we are talking about a country that is huge and doesn’t feel the need to cut a deal.”
“India doesn’t need to cut a deal.”
That is the bottom line: The British are still stuck in the past, when India was their colony, but that’s no longer the case. India has a long list of trade partners, from the European Union to the United States, Japan, Oman, Peru, and Mauritius.
These countries or blocs are either discussing a trade deal with India or already have one. The United Kingdom is just another name on this long list. One that New Delhi can very well manage without, and the UK needs that reality check.
Views expressed in the above piece are personal and solely that of the author. They do not necessarily reflect Firstpost’s views.
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