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This Week in AsiaEconomics

Britain’s political turmoil upends promised trade deal with India

  • Talks on a deal have been ongoing since 2022 but appear to have stalled amid a succession of UK prime ministers and negotiating teams
  • Britain’s ruling Conservative Party is now widely tipped to lose this year’s general election, bringing yet more uncertainty to proceedings

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Shipping containers are seen at the Port of Felixstowe in London. A trade deal could help boost Britain’s access to India’s vast market post-Brexit. Photo: AFP
Biman Mukherji
An ambitious trade deal between India and Britain is likely to be delayed until a general election is held to form a new UK government, observers say, amid political uncertainty after British Prime Minister Rishi Sunak suffered a string of defeats in local polls.

Sunak’s Conservative Party lost control of 10 councils and more than 470 council seats. The party also ceded 10 Police and Crime Commissioners to Labour, which could undermine its election campaign.

“Successive British prime ministers have been claiming the UK’s largest trade deal post-Brexit was imminent with India. This hasn’t happened because the ministerial personnel on the UK side kept on changing, including several prime ministers,” said Pratik Dattani, founder of London-based think tank Bridge India.

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“It is more likely that this [trade deal] will be concluded after the general election,” he said of the agreement hailed as a shot in the arm for trade between both sides. The proposed deal would be one of the key discussion points at an India Week event to be held in London in early July.

Britain’s next general election must be held no later than January 2025, which will determine the composition of the House of Commons and the next UK government. In January, Sunak said he expected to go to the polls “in the second half” of this year.

British Prime Minister Rishi Sunak’s Conservative Party lost control of 10 councils and more than 470 council seats in local elections earlier this month. Photo: UK Parliament/via AFP
British Prime Minister Rishi Sunak’s Conservative Party lost control of 10 councils and more than 470 council seats in local elections earlier this month. Photo: UK Parliament/via AFP
The trade deal could offer Britain greater access to India’s vast market – partially compensating new restrictions on trade with the European Union post-Brexit – while India could benefit from a reduction of duties and non-trade barriers, boosting exports.
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