'Nearly there': Tariff cuts in sight for whisky, cars, pharma as UK, India trade talks enter final phase

The UK and India have reached a pivotal point in their ongoing free trade agreement discussions, with 90% of the deal agreed upon, The Guardian reported. The UK government is optimistic about finalising this significant trade partnership with India, a nation of 1.4 billion people, within the year. 

Citing a source close to the negotiations, the report stated, "We are nearly there. We are as close as we’ve ever been, but conversations at the political level cut both ways." Mobility, a contentious issue surrounding visas for Indian workers, has largely been resolved, according to government sources. 

During a briefing with UK trade department negotiators, businesses were informed that 90% of the agreement has been settled, with remaining discussions focused on tariffs for whisky, cars, and pharmaceuticals. The resolution of these issues could result in substantial tariff reductions for UK exports, particularly scotch whisky and cars, to India. This is seen as a key development for the UK economy, which has been affected by previous US-imposed tariffs. 

In related discussions, Finance Minister Nirmala Sitharaman engaged with UK officials, expressing a "great sense of positivity and dedication" towards concluding the deal soon. Sitharaman noted that India is pursuing more bilateral trade agreements due to global uncertainties "multiplying by the day." Her visit also saw the announcement of £128 million in new export deals and investments with the UK. 

A bilateral investment treaty is concurrently being negotiated alongside the free trade agreement. This treaty is a priority for the UK, offering potential benefits for the British financial services sector. Successful negotiations could lead to enhanced legal protections for investments between the two countries. 

Controversy remains around India's request for exemption from the UK's forthcoming carbon border adjustment mechanism. This tax, aimed at supporting UK steel producers, could be contentious if India, as a developing country, is exempted. The UK initiated negotiations for this trade agreement in January 2022, viewing it as a vital post-Brexit opportunity. 

Chancellor Rachel Reeves highlighted the urgency of advancing trade deals with countries like India to "kickstart economic growth." This sentiment aligns with the broader UK strategy to strengthen international economic ties post-Brexit, underscoring the importance of these ongoing negotiations. 

Keshav Murugesh, CEO of technology company WNS, stated that enhanced UK-India ties would "fuel innovation and generate high-skilled jobs" in both nations. As negotiations continue, businesses and officials remain hopeful that the remaining issues can be swiftly addressed, paving the way for a landmark trade agreement.