The United Kingdom and India are set to resume negotiations on a free trade agreement (FTA) on Monday, nearly a year after discussions were paused due to general elections in both countries.
Jonathan Reynolds, the UK’s Business and Trade Secretary, is leading the British delegation in Delhi, where he will meet his Indian counterpart, Piyush Goyal, for a two-day session aimed at breaking the deadlock on key issues.
Ahead of the meeting, Reynolds described a trade agreement with India as a “no-brainer,” citing forecasts that India will soon become the world’s third-largest economy. He emphasized that securing a trade deal is a “top priority” for the newly elected Labour government.
“Growth will be the guiding principle in our trade negotiations with India, and I’m excited about the opportunities on offer in this vibrant market,” Reynolds said in a statement.
For India, the talks are of renewed significance following U.S. President Donald Trump’s decision to impose reciprocal tariffs on imported goods, including those from India. Prime Minister Narendra Modi’s government is also targeting $1 trillion in exports by the 2030 fiscal year, making the UK a key partner in its economic strategy.
Negotiations between the two nations have faced challenges despite more than a dozen rounds of talks since 2022. Major sticking points include:
- High Tariffs: India imposes steep duties on products like Scotch whisky and British cars, which the UK wants reduced.
- Visa and Mobility Rules: India seeks easier visa processes and relaxed fees for its students and professionals working in the UK.
- Social Security Concerns: India may also push for exemptions on national insurance contributions for its citizens on temporary business visas, who are currently required to pay but cannot access UK social benefits.
The talks mark the first engagement under the new Labour government, which announced the resumption of negotiations after Prime Minister Sir Keir Starmer met Modi during the G20 summit in Brazil last November.
The UK and India currently share a trade relationship worth £41 billion ($52 billion), according to official figures. A trade agreement could open up significant new markets for both countries.
London has identified advanced manufacturing, clean energy, and professional services as sectors that could benefit from an FTA. British exports, including cars, financial services, and Scotch whisky, stand to gain billions of dollars if market barriers are eased.
India, meanwhile, is pushing for greater mobility for its skilled workers and students, along with faster visa processing times to support its growing global workforce.
During his visit, Reynolds and Goyal will tour the BT Group’s office in Gurugram, a northern Indian business hub. UK Investment Minister Poppy Gustafsson will also engage with business leaders in Mumbai and Bengaluru, two of India’s largest financial centers.
India has recently become more active in pursuing free trade agreements. In 2023, it signed a $100 billion deal with the European Free Trade Association (EFTA) after 16 years of negotiations. Talks with the European Union are also expected to resume this year, further signaling India’s ambitions to expand its global trade footprint.
As discussions resume, both governments are under pressure to deliver a breakthrough that could reshape economic ties and provide new opportunities for businesses and workers on both sides.
