The UK and India have relaunched their trade negotiations after a pause caused by elections in both countries last year. UK business secretary Jonathan Reynolds and Indian commerce minister Piyush Goyal will meet in New Delhi for two days of talks aimed at securing a long-awaited trade agreement between the two nations. UK officials, including investment minister Poppy Gustafsson, are also set to meet with investors in Mumbai and Bengaluru, promoting the UK as a top destination for Indian capital. Sectors such as advanced manufacturing, clean energy, financial services, and professional services are seen as areas that could benefit from a potential deal.
The UK government, under Sir Keir Starmer’s leadership, has made an agreement with India a top priority for fresh trade deals, alongside other key nations including several Gulf countries, Israel, South Korea, Switzerland, and Turkey. Indian officials have also shown optimism regarding the prospects of a deal, but there are still points of contention, notably around the issue of visas for short-term Indian workers in the UK and India’s request for social security payouts for its citizens who have worked in Britain. Before the talks were paused, India had also pushed for an asymmetrical tariff framework, arguing that while both countries’ economies are currently similar in size, India’s rapid economic growth will create greater long-term opportunities.
Reynolds has emphasized the importance of India as a trade partner, highlighting that the country is on track to become the third-largest global economy by 2028. He believes that growth will be a central focus of the negotiations, and that the opportunities available in India’s vibrant market are significant. India’s robust growth projections, along with its expanding middle class set to reach 95 million people by 2035, make it an attractive market for UK exports. In fact, foreign direct investment from India into the UK grew by 28% year on year by the end of 2023.
While the UK-India trade relationship is already valued at £41 billion annually, and supports over 600,000 jobs in both countries, the pursuit of a deal with India has proven more challenging than many Brexit proponents had hoped. Former Prime Minister Boris Johnson had set expectations high, suggesting that a deal could be secured by Diwali in 2022. Despite these delays, Richard Heald, chair of the UK India Business Council, welcomed the renewed discussions as evidence of the UK’s commitment to a new, ambitious trade and investment relationship with India.
