India and the United Kingdom have resumed trade negotiations with the goal of more than doubling bilateral trade within the next decade, Indian Trade Minister Piyush Goyal announced on Monday. The discussions, which had been paused last year due to elections in both countries, mark a renewed push towards finalizing a long-awaited free trade agreement (FTA).
Goyal and Britain's Business and Trade Secretary Jonathan Reynolds met in Delhi to restart negotiations and accelerate progress on a trade pact and an investment treaty. The renewed efforts come amid global trade tensions, including tariff threats from U.S. President Donald Trump. However, the ministers did not directly comment on whether Trump's recent orders to raise tariffs on imports have influenced their discussions.
The resumption of talks follows a meeting between Indian Prime Minister Narendra Modi and UK Prime Minister Sir Keir Starmer on the sidelines of the G20 summit in November 2024. Goyal emphasized that the trade agreement could be a "path-breaking" deal, potentially boosting trade two to three times within a decade.
While both sides are eager to finalize the agreement, certain sticking points remain. India is seeking easier visa access for its professionals and students to work in the UK, while Britain is pushing for lower tariffs on Scotch whisky and agricultural products, including dairy. Reynolds acknowledged that trade negotiations often involve "sensitivities" but expressed optimism about reaching a balanced deal.
Goyal clarified that immigration would not be included in the trade discussions, despite reports suggesting otherwise. Reynolds also stated that the UK government was handling immigration separately from trade talks.
India and the UK currently share a trade relationship valued at £41 billion ($52 billion) as of September 2024. London sees significant growth potential in sectors such as advanced manufacturing, clean energy, and professional services, while India is focused on increasing its exports as part of its broader economic ambitions.
The talks also hold strategic significance for both nations. India is looking to secure stronger trade relationships amid global economic shifts, while Britain views a deal with India as a crucial step in strengthening its post-Brexit trade network.
Investment Minister Poppy Gustafsson is also visiting India, engaging with business leaders in Mumbai and Bengaluru to encourage Indian firms to invest in the UK. Additionally, discussions are underway for a separate social security treaty to benefit Indian professionals working in Britain.
Despite multiple rounds of negotiations since 2022, the agreement has yet to be finalized. Previous deadlines set under former UK Prime Ministers Boris Johnson and Liz Truss passed without an agreement. However, Reynolds emphasized that securing a trade deal remains a "top priority" for the Labour government.
With both nations eager to strengthen economic ties, the coming months will be crucial in determining whether the long-awaited agreement can finally be reached.