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British Parliament warns Govt for not rushing on FTA to meet Diwali deadline

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Borris Johnson
Image: Agencies

A UK parliamentary panel on Friday warned the government against accepting a poor deal to rush things through simply to meet a deadline set for the completion of a free trade agreement (FTA) with India.

The House of Commons International Agreements Committee, 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 outgoing Prime Minister Boris Johnson during his visit to India in April.

The committee cautioned that could risk giving up a good deal for a fast one, by setting a time ambition over and above content.

A growing economy, as well as a growing middle class and consumer market, make India an attractive trading partner for the UK.

The UK government, however, must not accept a poor agreement simply to meet a deadline, said Baroness Dianne Hayter, chair of the committee. We have noted that the aspirations in the negotiating objectives are particularly challenging because some would require changes to India’s own cultural and legal approach, which are unlikely to be achieved, or would take a long time, she said.

We reiterate our recommendation that the government should publish a trade policy, showing how trade links into broader foreign policy, security, defence, and other domestic objectives, as well as labour, women’s and human rights, and the environment.

This will enable trade policy to be understood in relation to other priorities and enable us to assess the impacts and trade-offs, she said.

The cross-party committee claims that India’s historically protectionist policies, different regulatory approaches, and business practices would mean changes in domestic legislation, which could be a lengthy process to implement.

It also references the practice in India of requiring businesses to make so-called facilitation payments, different administrative requirements at the national and state level, a lengthy application process for business permits, a complex tax regime, low levels of contract enforcement and limited IP protections.

The committee, therefore, questions the arbitrary Diwali deadline set for the conclusion of the negotiations, cautioning that the government could risk giving up a good deal for a fast one by setting a time ambition over and above content, it said.

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