India and the United Kingdom are set to resume free trade discussions on Monday, nearly a year after the negotiations were halted in anticipation of general elections in both nations.
Jonathan Reynolds, the UK’s business and trade secretary, has arrived in Delhi for a two-day meeting with his Indian counterpart, Piyush Goyal, to initiate discussions on key trade matters.
In anticipation of the upcoming meeting, Reynolds expressed that pursuing a trade deal with India was an obvious choice, particularly as projections indicate the country is set to emerge as the world’s third-largest economy within a few years.
Since 2022, the nations involved have engaged in over a dozen negotiations, yet a conclusive agreement continues to elude them.
Key issues in the ongoing discussions revolve around India’s elevated tariffs on Scotch whisky and the calls for easing fees and visa regulations for Indian students and professionals seeking to travel to the UK.
For the first time since the Labour Party assumed power in the UK, discussions are underway, with Reynolds emphasising that reaching an agreement is a “top priority” for his administration.
“Growth will serve as the guiding principle in our trade negotiations with India, and I am enthusiastic about the opportunities available in this dynamic market,” he stated.
The trade discussions in Delhi have gained fresh importance following US President Donald Trump’s announcement of reciprocal tariffs on imported goods from various nations, including India.
The United Kingdom stands as a significant trading partner for Prime Minister Narendra Modi‘s administration, which has set an ambitious goal of increasing exports by $1 trillion by the fiscal year 2030.
In November of the previous year, following Sir Keir Starmer’s meeting with Prime Minister Modi at the G20 summit in Brazil, the UK declared that discussions would resume in the new year.
According to a statement from the UK government, the trade relationship between the two countries is currently valued at £41 billion ($52 billion), and a potential trade deal could create new opportunities for both nations.
London has pinpointed sectors poised for potential growth, including advanced manufacturing, clean energy, and professional and trade services. A possible agreement may pave the way for a lucrative market for British cars, Scotch whisky, and financial services, valued at billions of dollars.
India advocates for enhanced mobility for its workforce and students heading to the UK and calls for expedited visa processing times.
The proposal could also aim to secure concessions for residents engaged in temporary work in the UK on business visas. These individuals must pay national insurance yet remain ineligible for social benefits.
Reynolds and Goyal are scheduled to visit the BT office located in Gurugram, a city in northern India, during Reynolds’ visit.
UK Investment Minister Poppy Gustafsson is currently in India, where she will engage in activities in Mumbai and Bengaluru, the country’s major business centres.
Following years of scepticism regarding free trade agreements, India has begun signing deals and is currently engaged in discussions with multiple countries and blocs. In a significant development, a $100 billion free trade agreement was finalised with the European Free Trade Association last year. This agreement, which took nearly 16 years of negotiations, involves a coalition of four European nations that are not part of the European Union.
Negotiations with the European Union are poised to resume this year.
