India-UK trade deal held up by ‘sticky’ issues as trade secretary visits Delhi
Kemi Badenoch heads to India this week in the hope of making progress on a trade deal, but government sources played down the prospect of an imminent breakthrough.
A source told Sky News that “tricky” issues have not yet been resolved as the talks enter their twelfth round, almost a year after a deadline announced by Boris Johnson.
Government insiders say a full trade agreement being struck in time for Rishi Sunak’s first official visit to India in September for the G20 summit is unlikely, despite “passion on both sides”.
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“It’s about the deal and not the date. There are several outstanding issues, and you leave the really tricky stuff until the end,” a UK government source said.
A breakthrough in talks is not impossible, insiders said, but after criticism from ministers of the UK’s deal with Australia, they say officials are not working to a deadline.
These difficult issues are understood to include relaxation of visa rules for Indian workers – as well as continued wrangling on trade standards.
Ms Badenoch will attend a meeting of G20 trade ministers in Jaipur and then head to Delhi to meet with industry minister Piyush Goyal.
While in Delhi, she will also meet the chairman of Tata group Natarajan Chandrasekaran, to discuss the company’s investments in the UK including the steelworks at Port Talbot in South Wales.
A deal with India, which would be the largest bilateral post-Brexit trade deal the UK has struck, was one of Ms Badenoch’s key priorities as trade secretary. Progress is understood to have been made on agreements to reduce prohibitive import tariffs on cars and whisky – to open up opportunities for British firms.
India is predicted to be the world’s third largest economy by 2050, and the UK government estimated in 2019 that a trade deal could increase UK GDP by around £3.3bn by 2035.
MPs were critical of the announcement by Boris Johnson, who promised last April that a deal would be signed “by Diwali”, an Indian autumn festival that occurred last year in October. The deadline has long passed.
Ms Badenoch said in December, when embarking on an earlier round of negotiations, that an “amazing” deal was possible, but she had no plans to discuss if student visas were part of it. Time-limited visas for highly qualified workers were under discussion, she told a newspaper.
Her trip last year was billed as a reset for negotiations. Home Secretary Suella Braverman was said to have set back the talks when she said in an interview last year that she had “concerns about an open borders migration policy with India” and pointed out that “the largest group of people who overstay [their visas] are Indian migrants”.
Speaking to Sky News, Labour’s shadow chief secretary to the Treasury, Pat McFadden, said his party would not rule anything out when asked if they opposed more visas being given to India.
Shadow trade secretary Nick Thomas-Symonds said: “The Conservatives’ record on trade negotiations has been to deliver bad deals or no deals at all.
“They committed to delivering agreements with India and with the United States by the end of 2022, yet failed to meet their own deadline. So them trumpeting the latest round of trade talks falls far short the concrete action needed to get any deal across the line.
“India is a key partner for the UK, we have deep historical links and it is a fast-growing economy, so Labour is committed to deepening our trade links.”
Mr Sunak‘s appointment as prime minister last year triggered great interest in India, with the TV station NDTV greeting it as an “Indian son rises over the Empire”.
With both he and Narendra Modi expecting to face elections next year, a government source said there was “genuine passion on both sides” for a deal to come together.
Recent reports in India have suggested a deal is closer than UK officials say. Indian commerce secretary Sunil Barthwal claimed in the summer that it could be signed “well before” the end of the year.
It would be India’s first free trade deal with a developed country, after an interim pact with Australia last year. Long-running talks have been held with the EU and US on trade.
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A Department of Business and Trade spokesperson said: “The UK and India are committed to working towards the best deal possible for both sides. We’ve made good progress in closing chapters, and are now laser-focused on goods, services, and investment.
“While we cannot comment on ongoing negotiations, we are clear that we will only sign when we have a deal that is fair, balanced, and ultimately in the best interests of the British people and the economy.
The US Office of the Comptroller of the Currency has affirmed that national banks can intermediate cryptocurrency trades as riskless principals without holding the assets on their balance sheets, a move that brings traditional banks a step closer to offering regulated crypto brokerage services.
In an interpretive letter released on Tuesday, the regulator said banks may act as principals in a crypto trade with one customer while simultaneously entering an offsetting trade with another, a structure that mirrors riskless principal activity in traditional markets.
“Several applicants have discussed how conducting riskless principal crypto-asset transactions would benefit their proposed bank’s customers and business, including by offering additional services in a growing market,” notes the document.
According to the OCC, the move would allow customers “to transact crypto-assets through a regulated bank, as compared to non-regulated or less regulated options.”
The letter also reiterates that banks must confirm the legal permissibility of any crypto activity and ensure it aligns with their chartered powers. Institutions are expected to maintain procedures for monitoring operational, compliance and market risks.
“The main risk in riskless principal transactions is counterparty credit risk (in particular, settlement risk),” reads the letter, adding that “managing counterparty credit risk is integral to the business of banking, and banks are experienced in managing this risk.”
The agency’s guidance cites 12 U.S.C. § 24, which permits national banks to conduct riskless principal transactions as part of the “business of banking.” The letter also draws a distinction between crypto assets that qualify as securities, noting that riskless principal transactions involving securities were already clearly permissible under existing law.
The OCC’s interpretive letter — a nonbinding guidance that outlines the agency’s view of which activities national banks may conduct under existing law — was issued a day after the head of the OCC, Jonathan Gould, said crypto firms seeking a federal bank charter should be treated the same as traditional financial institutions.
According to Gould, the banking system has the “capacity to evolve,” and there is “no justification for considering digital assets differently” than traditional banks, which have offered custody services “electronically for decades.”
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From ‘Choke Point 2.0’ to pro-crypto policy
Under the Biden administration, some industry groups and lawmakers accused US regulators of pursuing an “Operation Choke Point 2.0” approach that increased supervisory pressure on banks and firms interacting with crypto.
Since President Trump took office in January after pledging to support the sector, the federal government has moved in the opposite direction, adopting a more permissive posture toward digital asset activity.
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CryptoUK, a UK-based cryptocurrency trade association, has announced that it will join The Digital Chamber, a US crypto policy advocacy group, potentially marking a significant cross-collaboration on digital asset regulation between the two countries.
In a Tuesday notice, CryptoUK said its team would fall under The Digital Chamber’s umbrella as part of a “unified, cross-border advocacy platform.” Both groups have worked in their respective countries to promote policies favoring the cryptocurrency and blockchain industry, starting with The Digital Chamber in 2014 and CryptoUK in 2018.
“CryptoUK has always aspired to ensure we are driven by policy-led issues, member collaboration, and regulatory engagement,” said Su Carpenter, CryptoUK’s executive director.
The partnership between the two advocacy groups comes as US lawmakers move forward on negotiations to pass a digital asset market structure bill, aiming to establish regulatory clarity for the industry. In the UK, policymakers announced plans to collaborate with their counterparts in the US to explore crypto laws and regulations.
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US-based crypto advocacy organizations, such as The Digital Chamber, have garnered support from former regulators and members of Congress as the Trump White House directs policies toward the industry. Among these groups are the Solana Policy Institute, the Blockchain Association, the Crypto Council for Innovation, and the American Innovation Project.
UK central bank moves forward on stablecoins
On Nov. 10, the Bank of England released a consultation paper to propose a framework for “sterling-denominated systemic stablecoins.” The move by the country’s central bank marked a step toward the UK seeming to play catch-up to the US, where the government passed a law regulating payment stablecoins in July.
Bank of England Deputy Governor Sarah Breeden signaled before the publication of the paper that the central bank’s actions were in response to the US advancing stablecoin policies, and it was “really important” to be synchronized on rules.
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Kemi Badenoch has refused to say that the Conservatives are intending to win next May’s local elections, despite being repeatedly pushed on the issue.
Asked twice to define success for her party at the elections, the Tory leader merely said that she is “going to be fighting for every vote”.
Speaking to Sky News, she added: “Success is going to be people seeing the Conservative Party as the only party that is competent and credible enough to do the tough stuff that this country needs.”
The comments come as the Conservatives continue to trail in the polls.
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Watch Kemi Badenoch’s interview with Sky News in full
New data released by YouGov this morning has put the Tories in third place behind Reform and Labour, a space they have largely occupied throughout the year. The pollster’s weekly voting intention analysis put Ms Badenoch’s party on 18%, down one percentage point.
YouGov’s weekly voting intention poll has the Tories down one percent on last week, and just three above the Greens. Pic: YouGov
Ms Badenoch gave a speech on welfare costs in London on Tuesday, where she attacked the government’s plans to tackle child poverty. Afterwards, she sat down with Sky News political correspondent Sam Coates.
Asked about the local elections, she said: “There are going to be local elections all over the country, and there’s a conservative message that I want everyone to hear: Our country’s not working properly.
“There are fundamental things that need to change. We need to create jobs. Otherwise, we’re not going to have money for councils.”
She added: “We’ve seen new parties like Reform come in. They’re making a hash of things at council level. We need to make sure that people can see the benefits of voting Conservative.”
Ms Badenoch also refused to score her party’s performance out of 10. Pic: PA
When it was pointed out that she had not defined success as winning the local elections, Ms Badenoch said: “The country is going to decide. We’re going to put out an offer, and we’re going to fight for every vote.”
May will see local council elections, as well as votes for the Senedd in Wales and the Scottish Parliament. They are seen as a crucial moment for the Tory leader – and also for Prime Minister Sir Keir Starmer.
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‘Of course poverty bothers me’
Ms Badenoch also refused to score the party’s performance out of 10, as the year draws to a close, and she marks a little over 12 months as leader.
She told Sky News: “When I look at the historic defeats which Conservatives suffered last year, things are definitely better.”
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Challenged on the Tories’ position in the polls, Ms Badenoch said: “Of course, we have a mountain to climb.
“We lost more seats [in 2024] than we’ve ever done in our 200-year history. This was always going to be a long road ahead.”
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