New Delhi, India: India and the United Kingdom are set to restart free trade negotiations, nearly a year after discussions were paused due to general elections in both nations.
UK Business and Trade Secretary Jonathan Reynolds is in Delhi to meet his Indian counterpart, Piyush Goyal, for two days of talks aimed at reviving discussions that began in 2022 but have yet to result in an agreement.
Reynolds described the trade deal as a “no-brainer”, emphasizing that India is projected to become the world’s third-largest economy and securing a deal is a top priority for the UK’s new Labour government.
Key Trade Issues
Major sticking points in the negotiations include;
- India’s high tariffs on Scotch whiskey
- India’s demand for relaxed visa rules and lower fees for students and professionals going to the UK
- Market access for British cars, whiskey, and financial services
- India’s request for greater mobility for working professionals and faster visa processing times
- Concessions for Indian workers on business visas, who currently pay national insurance in the UK but are ineligible for social benefits
The talks come as India reassesses its trade partnerships, particularly in light of US President Donald Trump’s decision to impose reciprocal tariffs on imported goods, including those from India.
For the Modi government, the UK remains a high-priority trade partner, with an ambitious target of growing exports to $1 trillion by FY30.
Economic Impact
The current UK-India trade relationship is valued at £41 billion ($52 billion), and a successful trade deal could unlock significant opportunities for both countries. The UK sees potential in sectors like advanced manufacturing, clean energy, and professional and trade services, while India is eager to enhance trade mobility and streamline its access to the UK market.
London hopes an agreement will provide a valuable market for British exports, particularly Scotch whiskey, automobiles, and financial services, while also boosting investment ties.
During his visit, Reynolds and Goyal will also tour the BT office in Gurugram, reinforcing the UK’s business presence in India. Meanwhile, UK Investment Minister Poppy Gustafsson is visiting Mumbai and Bengaluru to engage with Indian businesses.
Trade Network
India has increasingly focused on signing free trade agreements with multiple partners. Last year, it finalized a $100 billion deal with the European Free Trade Association (EFTA)—comprising four non-EU European countries—after 16 years of negotiations. It is also preparing to resume trade talks with the European Union this year.
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