India-Britain trade deal to miss Diwali deadline, say sources

A free trade agreement between India and Britain will not be done in time for Diwali in late October, two sources in New Delhi told Reuters on Friday, although it was not immediately clear what was causing the delay.

Previous sticking points have included a steep import duty on British whiskey for sale in India and India's demand for more visas for Indian students and businesses.

After meeting Indian Prime Minister Narendra Modi in New Delhi in April, then-British premier Boris Johnson said that the two leaders had agreed to get a deal done by the Hindu festival, which falls on Oct. 24 this year. The aim is to double bilateral trade by 2030, from more than $31 billion now.

The sources declined to be named ahead of an official announcement but India’s foreign ministry spokesperson, Arindam Bagchi said the Diwali deadline had not been cast in stone.

“There was a general goal of trying to get it done by Diwali. But goals are dependent on negotiations,” he told a news conference on Friday. “So let me not complicate the negotiators’ lives by saying it has to be done by a certain date.”

Asked if India’s demand for more visas was holding up negotiations, Mr. Bagchi did not answer directly but said there was an understanding between both countries on “mobility and consular matters” which would require “mutual implementation”.

India’s trade ministry and Britain’s trade and foreign departments did not immediately respond to requests for comment.

British Prime Minister Liz Truss’ spokesman said on Thursday her government still wanted to secure a deal with India by Diwali but would not sacrifice quality for speed.

Also on Thursday, British foreign minister James Cleverly said that his country wanted to have an even stronger trading relationship with India after reported comments made by interior minister Suella Braverman about the possible impact of Indian migrants in Britain.

Indian foreign minister S. Jaishankar said on Twitter that he had a conversation with Cleverly and both “reviewed various aspects of our bilateral relationship” and looked forward to an early in-person meeting.

Apart from more visas, India wants to increase exports of leather, textiles, jewellery and food products to Britain, while Britain is keen to sell more whiskey to India and wants it to reduce an import duty of 150%.

Also, Reuters reported last week that Indian car makers had proposed cutting to 30% the tax rate on imported cars as part of the trade deal with Britain, from 60% to 100% now.