Failure to clinch a trade agreement with the UK would be a missed opportunity for India, a country on which many economies are relying in the face of rising geopolitical tensions.

India's reputation as one of the toughest trade negotiators in the world is becoming more of a problem for UK Prime Minister Liz Truss than just an inconvenience.

Prime Minister Narendra Modi promised that “early harvest" trade deals would be a top priority in 2021. However, India has only signed two new deals so far, one with the United Arab Emirates and the other with Australia. Now, things don't look good for a much-talked-about deal with the UK.

India's position could force Truss to make concessions since she is already under a lot of pressure to make big trade deals. Failure will be another blow to her hope that after the UK leaves the EU, it can make new deals in markets that were closed to it before because it was a member of the EU.

The US has already said that it won't make a deal with the UK in the near future.

It will be a missed opportunity if India can't reach a trade deal with Britain. Many economies are putting their hopes on India as geopolitical conflicts between the west and China get worse. If the deal goes through, it will be the biggest and most ambitious free trade agreement India has ever made.

Immigration Concerns

But talks between India and the UK have hit a snag over how to make it easier for thousands of skilled workers from the South Asian country to work in the UK. This is likely to push the deadline for finalizing a free-trade deal past October.

As a result of Suella Braverman's concerns about migration from India, New Delhi has taken a stronger stance in the ongoing negotiations. India said that both countries should “honor" the “understanding" when it comes to migration mobility because of what was said last week.

As part of the deal, New Delhi also wants to get back the 500 million pounds that Indian workers paid into Britain's social security system. This is according to people who know about the situation. People also said that the UK's offer to limit the movement of skilled workers would make the proposed trade deal favor Britain and not be good for both countries.

Other Hurdles

As the deadline for talks to end gets closer, India hasn't come to an agreement on important issues for the UK, like lowering import taxes on cars and Scotch whisky, which is one of Britain's main demands. Modi's government is also waiting for progress on the issue of skilled workers' mobility.

Other things that are slowing down the talks are the UK's insistence on being exempt from rules on data localization that affect industries like financial services and give India more access to its government contracts. People said that India said it couldn't change the data localization rules because of its own laws.

Both sides think that the deal will double the amount of trade between them by 2030. The Indian government says that trade between India and the UK was worth more than $17 billion in 2021-22.

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