NEW DELHI: India and the UK on Monday dismissed a report that New Delhi had halted talks on a trade deal over violence during a pro-Khalistan protest in London, though people familiar with the matter said progress in the negotiations has been affected by a host of issues.

The people cited above described as “baseless” a report by The Times newspaper that the Indian side had suspended talks on a free trade agreement (FTA) over Britain’s failure to condemn a pro-Khalistan group involved in violent protests outside the Indian mission in London last month.

The Indian side reacted angrily to the protests in London, and British deputy high commissioner Christina Scott was summoned to the foreign ministry for registering a strong protest over “actions taken by separatist and extremist elements” against the Indian mission. The Indian side also reduced security for the UK high commission and the British envoy’s residence in Delhi.

Britain too dismissed the report on the halting of trade negotiations, with a spokesperson for the department for business and trade saying: “Both the UK and India are committed to delivering an ambitious and mutually beneficial FTA and concluded the latest round of trade talks last month.”

British foreign minister James Cleverly has “condemned the recent acts of violence” at the Indian mission in London and the government is working with the Metropolitan Police to review security and make changes to ensure the safety of Indian staff, the spokesperson said.

However, the people cited above acknowledged the trade negotiations had run into rough weather following the change in the British government’s leadership last year.

“It is wrong to say that FTA negotiations with the UK have been halted. But at the same time, it is also true that the change of leadership in Britain has not been very encouraging for an early conclusion of the deal,” one person said. He was referring to the exit of the Boris Johnson government last year.

After the change in leadership, the UK has attempted to bring up some issues that had been amicably settled, the people said. Britain is also pushing non-trade issues related to labour and the environment.

“India has recently concluded an FTA with Australia while resolving a majority of trade issues in mutual interest and respecting sensitivities of both sides. Now, India and Australia are negotiating a comprehensive deal. This is the ideal way to move forward,” the person said.

“Both sides must respect sensitivities and popular sentiments. Success of any trade deal is dependent on acceptance by people. Besides economic cooperation, an amicable socio-political relationship is needed,” he said.

The eighth round of India-UK trade talks were held during March 20-31. The next round is expected to be held in London later this month.

India and the UK had come close to finalising an FTA last year, and then commerce secretary BVR Subrahmanyam had said in September 3 the trade deal was “very much on track”. The two sides missed a deadline for finalising the deal by Diwali in October 2022, and the people believe several more rounds of talks will be needed to resolve thorny issues such as market access and mobility for professionals.

UK high commissioner Alex Ellis told HT last month that both sides were into the “tough stuff” and the “hard bits” in negotiations. “We are down to core issues, where both countries would like to see a bit more opening of each other’s goods markets, looking at tariffs, some opening on the services side,” he said.