Diwali Target For India-UK FTA Possible But Not Definite, Say Experts After PM Johnson’s Exit

It is always good to have a deadline to work towards while negotiating a free trade agreement (FTA) but the Diwali target set for the India-UK FTA by the outgoing British Prime Minister Boris Johnson does not have to be set in stone, according to strategic and industry experts here.

At the end of a week of monumental political turmoil which ended with Johnson announcing his resignation to make way for a new Prime Minister in a few months’ time, the inevitable focus has been on what this means for India-UK bilateral ties generally and the historic FTA now in its fourth phase of negotiations more specifically.

While there is general consensus that there is unlikely to be any significant shift in foreign policy stance under a new Conservative Party incumbent at 10 Downing Street, a delay of a few months to the October deadline for the conclusion of a draft FTA may well be on the cards.

“India did some very quick deals with the UAE and Australia, in less than 90 days, but those are much lighter in content and comprehensiveness than what we are planning with the UK-India FTA,” said Confederation of British Industry (CBI) President Lord Karan Bilimoria, who heads up the UK-India Industry Taskforce as a joint commission to enhance cross-industry collaboration on the ongoing trade negotiations.

“I would much rather have a more comprehensive deal that takes slightly longer to complete. It’s good to have a deadline, good to have that target to try and finish by Diwali. But it may not be the end of October but the end of December; my target is the end of this year,” said the Indian-origin businessman.

He warned of inevitable last-minute issues but remained “very optimistic” about completing a comprehensive pact within this year because of the reports of “good progress” in completing the estimated 26 chapters.

“Boris Johnson’s prime ministership saw an unprecedented political commitment towards boosting ties with India, reciprocated by Prime Minister Narendra Modi,” said Rahul Roy-Chaudhury, Senior Fellow for South Asia at the London-based International Institute for Strategic Studies (IISS) think tank.

“While Johnson firmly laid the direction of travel with India, he leaves before the pace of travel has been determined... [and] with Johnson as a caretaker Prime Minister, it remains to be seen how effectively he can conclude a landmark bilateral FTA by October, to be signed by his successor, and whether a much-needed legacy defence technology cooperation can be achieved," he said.

Gareth Price, Senior Research Fellow, Asia-Pacific Programme, at the UK-based international affairs think tank Chatham House, said that FTAs by their very nature take a lot of time to negotiate and an obsession with the deadline should not result in a diluted enhanced trade partnership.

“It’s just a sort of gut reaction that it’s good to have a deadline but I wouldn’t bet a lot of money that it would definitely be met. With the upheaval in the UK, if there are concessions to be made it would be interesting to see whether they can be agreed in that timeframe,” said Price.

On the legacy of Boris Johnson’s nearly three-year term in office, the overwhelming view is that he would leave behind a very strong India-friendly foreign policy focus and little would change in terms of the focus on strengthening relations with India and the wider Indo-Pacific region.

“There’s no question about his love for India. India has been a priority country to him, demonstrated by the launch of the FTA talks… This is such a special centuries-old relationship, which will only strengthen further,” said Bilimoria.

“The focus on India was in part a function of Boris Johnson-led government moving away from Europe and so probably whoever succeeds him is going to have similar views. But if it’s someone more focused on rebuilding the relationship with Europe, then by default there will be less bandwidth for a focus on India and other countries,” reflected Gareth Price.

Anand Menon, professor of European Politics and Foreign Affairs at King’s College London and director of the think tank UK in a Changing Europe, does not foresee any significant shift in the UK’s Europe stance that could impact its Indo-Pacific focus.

“I don’t see much change in foreign policy post-Johnson. I think the biggest legacy that Boris Johnson has on British politics in general is Brexit, which has forced the UK to be more active in foreign policy,” said Menon.

“We had Brexit so therefore we had Global Britain and a far more activist British diplomacy than we have had for a long time. That message won’t change at all… In a way because foreign policy is such a low priority that no successor is going to spend political energy re-doing it,” he said.

From an economic perspective as well, City of London Policy Chair Chris Hayward believes there will be a consistent focus on an enhanced India-UK partnership.

“The next Conservative Prime Minister will build upon that work and continue to strengthen our ties with India. It is an incredibly important market to the UK, we would urge that we continue to build on the legacy,” said Hayward, who is planning a visit to Mumbai for high-level talks next week.