Canada’s Khalistani issue will not impact India-UK free trade deal, says UK after Trudeau speaks to Sunak

Image Source : AP Canadian PM Justin Trudeau and his Indian counterpart at Rajghat

The UK government, on Tuesday, said that the “serious allegations” over the murder of a Sikh separatist leader in Canada will not impact its own ongoing trade negotiations with India. Prime Minister Rishi Sunak’s spokesperson at 10 Downing Street was asked about the impact the issue may have on India-UK relations after a government spokesperson said the UK remains in “close touch” with the Canadian authorities.

It follows Canadian Prime Minister Justin Trudeau’s statement in Parliament on Monday that it is pursuing “credible allegations” of “potential” Indian links to the killing of Khalistani separatist leader Hardeep Singh Nijjar, the Chief of Khalistan Tiger Force and a designated terrorist. Canada also expelled an Indian diplomat.

The Ministry of External Affairs (MEA) in New Delhi on Tuesday strongly rejected the claims as “absurd and motivated” and dismissed a senior Canadian diplomat in a reciprocal move. “We are in close touch with our Canadian partners about these serious allegations,” a UK government spokesperson said.

“It would be inappropriate to comment further during the ongoing investigation by the Canadian authorities,” the spokesperson said.

Later, when Sunak’s spokesperson was pressed on the matter, he said work on the trade negotiations with India “continue as before”. India and the UK earlier this month agreed to continue to work at pace towards a “landmark” free trade agreement (FTA).

What is FTA?

It is worth mentioning that a free trade agreement is a deal between two or more countries where they agree on certain obligations that affect trade in goods and services, and protections for investors and intellectual property rights, among other topics. The main goal is to provide a better deal for citizens of the concerned countries involved. 

India and the UK have been negotiating an FTA since January last year, with a goal towards a comprehensive pact that is expected to significantly enhance the bilateral trading relationship worth an estimated GBP 34 billion in 2022. 

Why have India and the UK not struck the deal yet?

According to reports, the deal has been in a lingering state as the UK wants New Delhi to slash tariffs on British cars, and scotch whisky while India seeks some relaxation in visas for Indian professionals.

Visa issue

Notably, the immigration issue has been a major issue in London amid the fact the country itself struggling to boost its economy and provide the maximum number of jobs to its own population. Besides, the UK’s vote for BREXIT in 2016 also prompted the government to control the migration influx. In fact, this has become a hot topic in the UK elections.

As of now, it is not clear whether the UK would agree on visa relaxation, but the sources claimed it may allow with some terms and conditions. 

Labour laws

During the coronavirus pandemic, the whole world saw the worst economic phase and New Delhi had also sailed on the same boat. However, micro-economic industries had enabled the Indian government to collect taxes even at the helm of collapse. Apprehending the circumstances, New Delhi isn’t in the mood to take the risk again. Therefore, the Modi government has been asking his UK counterpart to frame proper labour and environmental protection laws. 

Import duty on cars

As of now, India imposes a 100 per cent duty on the import of cars from the UK– a slab the former wants to cut down in order to make a level playing field for foreign companies. Although sources claimed New Delhi might slash import duty by at least 25 per cent, it will exclude small-capacity cars. Besides, New Delhi also wants a cap on the number of vehicles sold under the lower tariffs.

Import duty on scotch whisky

India has a handsome whisky market but it imposes 150 per cent import duty on liquor, with an aim to protect its domestic market. But, the sources claimed New Delhi may slash the import duty up to 50 per cent. If the negotiations go as planned, it will be a groundbreaking step for the Indian liquor market.

(With inputs from agency)

Also Read: India-UK trade deal: Cheaper scotch whisky and cars on the cards, know reasons for delay in pact

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