UK Revives Trade Talks with India as Discussions Resume in Delhi
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A trade deal with India stands out as one of the Labour government’s key priorities. Following a pause in talks last year, which was pre-empted by general elections in both nations, negotiations have been reinvigorated.
Jonathan Reynolds, the UK’s business and trade secretary, met his Indian counterpart Piyush Goyal in Delhi on Monday to kickstart these two-day discussions. The focus of their talks is set on advancing the negotiations and ensuring that any deal reached is balanced, ambitious, and mutually beneficial for both countries.
The journey towards a final agreement has been rocky since 2022, with more than a dozen rounds of negotiations held but no concrete result yet achieved. Points of contention include high tariffs in India on Scotch whisky as well as the need to relax visa rules for Indian students and professionals looking to study or work in the UK.
The trade talks are being prioritized by the Labour government, which came into power recently. Reynolds emphasized that economic growth will be a guiding principle in these negotiations, expressing excitement about the potential opportunities presented by India’s vibrant market.
India is expected to become the world’s third-largest economy within a few years, making it an increasingly attractive target for foreign investment and trade deals.
The ministers held a joint press conference after their meeting. However, they did not set any deadlines for the conclusion of talks, unlike previous administrations led by Boris Johnson and Liz Truss whose earlier deadlines had gone unmet.
For India, these talks are crucial in light of US President Donald Trump’s imposition of reciprocal tariffs on imports from several countries including India. Additionally, the UK remains a high-priority trading partner for Prime Minister Narendra Modi’s government with ambitions to boost exports by $1 trillion within fiscal year 30.
The current trade relationship between the two countries is worth £41 billion ($52 billion), according to a statement from the UK government. A successful deal could unlock new opportunities in sectors such as advanced manufacturing, clean energy, and professional services. The potential also exists for British products like cars, Scotch whisky, and financial services to tap into India’s vast market.
India is seeking greater mobility for its working professionals and students traveling to the UK while advocating for faster visa processing times. It may also seek concessions allowing temporary workers on business visas in the UK who currently pay national insurance but are ineligible for social benefits.
During their joint conference, Goyal clarified that immigration was not a part of these free trade negotiations. “India has never ever discussed immigration in any free trade negotiations,” he stated. Reynolds echoed this point, stating that mobility for business is a separate issue from broader migration policies.
During Reynolds’ visit to India, the duo will also be visiting BT offices located in Gurugram, northern India. Alongside him are other UK officials such as Poppy Gustafsson from the Department of International Trade who plans to participate in events held in Mumbai and Bengaluru, two major business hubs.
India has become more open to free trade agreements recently after years of skepticism. The country signed a $100 billion deal with the European Free Trade Association (EFTA) just last year after 16 years of negotiations, aiming to boost its exports significantly.
The UK government is also planning to resume talks with the EU this year. Both countries stand at a critical juncture in their trade relationships as they navigate complex economic landscapes and seek mutually beneficial agreements for future growth.
