UK-India Restart Trade Talks After Nearly One Year Suspension

UK-India Restart Trade Talks After Nearly One Year Suspension

India and the UK have resumed their trade talks after nearly a year, which had been suspended due to the general elections in both countries. On Monday, UK Secretary of State for Business and Trade, Jonathan Reynolds, began two days of discussions in Delhi with his Indian counterpart, Piyush Goyal.

The goal of these talks is to "advance the trade deal and make it ‘balanced, ambitious, and mutually beneficial,’” Goyal wrote on X (formerly Twitter).

Since 2022, over 12 rounds of discussions have taken place between the two countries, but no final agreement has been reached yet. The main obstacles during the discussions have been high tariffs on Scotch whisky in the Indian market and the demand for relaxed visa conditions for Indian students and professionals in the UK.

This meeting marks the first time the talks are resuming under a Labour government in the UK. Reynolds has stated that securing a deal for his government is a "top priority." He mentioned, "Growth will be the guiding principle of our trade discussions, and I am excited about the opportunities in this vibrant market."

Following the meeting, the ministers participated in a joint press conference, but neither side set a specific timeline for concluding the talks. The deadlines set during the tenure of former ministers Boris Johnson and Liz Truss ended without a deal.

For India, these trade talks have gained importance following the decision of former US President Donald Trump, who imposed retaliatory tariffs on various countries, including India.

The UK also sees India as a high-priority trade partner for Prime Minister Narendra Modi's government, which aims to increase exports to $1 trillion by FY30. After meeting Prime Minister Modi at the G20 summit in Brazil last November, the UK announced that the talks would resume in early 2024.

Currently, the trade relationship between the UK and India is valued at £41 billion ($52 billion), and a trade deal could create new opportunities for both countries.

The UK has identified sectors where there could be gains, including advanced manufacturing, clean energy, and professional and business services. A trade deal could open a valuable market for UK cars, Scotch whisky, and financial services, potentially worth billions of dollars.

India is seeking greater mobility for its professionals and students in the UK and wants a quicker visa processing timeline.

After the meeting, Goyal stated, “Immigration is not part of the discussions.” Reynolds also pointed out that business momentum is "separate from immigration."

During his visit, Reynolds and Goyal will also visit the BT office in Gurugram. UK Investment Minister Poppy Gustafson is also visiting India and will participate in major business hubs in Mumbai and Bengaluru.

After years of uncertainty, India has signed or is in talks for trade deals with several countries. Last year, India signed a $100 billion trade agreement with four European Free Trade Association (EFTA) countries after nearly 16 years of negotiations.