What Impact Will Keir Starmer's Win Have On India-UK Free Trade Deal

India and the UK have been working towards clinching a pact to enhance the 38.1 billion pounds bilateral trading partnership but with India's phased general election followed by Britain's, the negotiations remain stalled. With both the elections done, the Free Trade Agreement (FTA) talks, which have been going on for two years, are expected to resume.

Keir Starmer, Labour Party leader set to be the UK's new Prime Minister, has constantly maintained that he wants to maintain good ties with the Narendra Modi administration, marking a departure from past policies under Jeremy Corbyn.

"We are confident that we have cleansed our ranks of any members with extremist views on India," Labour Party Chair Anneliese Dodds had said days ahead of the elections.

The FTA also featured prominently in the party's poll manifesto which stated their "commitment to pursue a new strategic partnership" with India.

Starmer has pledged to forge a new strategic partnership with India and enhanced bilateral cooperation in technology, security, education, and climate change underscores his ambition to elevate relations with one of the world's fastest-growing economies.

But the UK's insistence on lowering tariffs, which can be as high as 150% on key exports like food and automobiles, remains a sticking point in the trade deal talks. Additionally, issues regarding the UK's immigration policies, particularly concerning Indian service sector workers, continue to challenge the negotiations.

In response, India has raised concerns about proposed UK regulations, such as the carbon tax akin to the EU's carbon border adjustment mechanism, which could potentially undermine the tariff concessions agreed upon in the FTA.

Recent virtual meetings between Indian and UK officials in May aimed to restart discussions, focusing on economic assessments and the inclusion of new disciplines like environment, labour, gender issues, and digital trade in the agreement.

India, currently engaged in FTA negotiations with several other nations and unions including the EU, Australia, Eurasian Economic Union, and Peru, remains committed to advancing its global trade interests despite the challenges posed by the stalled talks with the UK.

As both countries navigate their post-election landscapes, the future of the India-UK FTA remains uncertain, contingent upon resolving key issues.