Exclusive | Boris Johnson's exit may prolong India-UK trade talks but won't complicate it: Officials

British Prime Minister Boris Johnson, who resigned on July 7, places a garland around the neck of a statue of Mahatma Gandhi at his Sabarmati Ashram in Ahmedabad during a cultural tour as part of his two-day visit to India in April 2022. (Image: AP)

British Prime Minister Boris Johnson's resignation may push back the completion date of the proposed trade pact between India and the UK, which is currently under negotiations and has a deadline of Diwali later this year, officials told Moneycontrol.

However, they stressed that they expect little change in position that may further complicate the talks and alter its course since the British stance on most issues of interest in the proposed pact has been consistent for a long time.

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UK PM Johnson resigned on July 7, and his successor is yet to be found as of the time of writing this report.

The India-United Kingdom Free Trade Agreement(FTA) aims to significantly boost trade by reducing tariffs on upto 65 percent of traded goods and up to 40 percent of services. On June 24, both nations concluded the fourth round of talks. The initial deadline of early 2023 had been brought up to Diwali, Commerce and Industry Minister Piyush Goyal had said last month.

"The changing of a leader in any country usually leads to a gap in policymaking as a new administration takes charge and new people are appointed who take some time to brush up on the issue. The same may happen for the UK, but any delay as a result of this can only be termed as incidental and an operational one," a senior official said.

But he said this change is not expected to create further differences on key issues than what is already there. "There are obviously several areas where both nations have sensitivities and are therefore more careful in negotiating. There are also some areas where reaching a consensus has remained difficult. But we don't expect the latest political developments to majorly change these," he stressed.

Officials said the current positions espoused by the UK government have developed over time. Case in point, the Conservative Party to which Johnson belongs has been in power since 2010. Successive administrations of British prime Ministers David Cameron, Theresa May, and Boris Johnson have supported widening trade partnerships with nations globally. This endeavor had culminated in the Brexit episode, whereby the UK left the European Union and took back control of the negotiating of trade agreements.

FTA issues

As is often the case, one of the main sticking points in the pact continues to be India's hesitation in opening up its market to foreign products and the equally aggressive push by foreign sellers in entering large segments of India's growing market that remain underexplored.