India and the UK have restarted free trade talks, nearly a year after negotiations were paused ahead of general elections in both countries.
Jonathan Reynolds, the UK’s business and trade secretary, met his Indian counterpart Piyush Goyal in Delhi on Monday and kicked off the two-day discussions.
The talks focused on “advancing” the negotiations and ensuring that the deal was “balanced, ambitious and mutually beneficial”, Goyal wrote on X.
The countries have held more than a dozen rounds of negotiations since 2022, but an agreement has remained out of reach.
Sticking points include high tariffs in India on Scotch whisky and relaxing fees and visa rules for Indian students and professionals going to the UK.
Talks are being held for the first time after the Labour Party came to power in the UK and Reynolds says securing a deal is a “top priority” for his 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,” he said in a statement ahead of the meeting.
India is forecast to become the world’s third-largest economy in a few years.
The ministers held a joint press conference after the meeting, but neither side offered a deadline for talks to conclude. Deadlines set by former ministers Boris Johnson and Liz Truss had passed without an agreement being finalised.
For Delhi, the trade talks have assumed renewed significance on the back of US President Donald Trump’s decision to impose reciprocal or tit-for-tat tariffs on imported goods from countries, including India.
The UK is also a high-priority trading partner for Prime Minister Narendra Modi’s government, which has an ambitious target to grow exports by $1 trillion by FY30.
The UK had announced in November last year – soon after Sir Keir Starmer met PM Modi at the G20 summit in Brazil – that talks would restart in the new year.
The two countries share a trade relationship worth £41bn ($52bn) currently, according to a UK government statement, and a trade deal could unlock new opportunities for both countries.
London has identified sectors that could benefit, which include advanced manufacturing, clean energy and professional and trade services. An agreement could also potentially unlock a valuable market for British cars, Scotch whisky and financial services worth billions of dollars.
India is seeking greater mobility for its working professionals and students to the UK, while pushing for faster visa processing times.
It may also seek concessions for its residents working temporarily in the UK on business visas, who are required to pay national insurance but are still ineligible for social benefits.
Speaking at the joint conference, Goyal said that immigration was not a part of the discussions.
“India has never ever discussed immigration in any free trade negotiations,” he said. Reynolds added that business mobility was a “separate issue” from immigration.
During Reynolds’ visit, he and Goyal will also visit the BT office in the northern Indian city of Gurugram.
UK Investment Minister Poppy Gustafsson is also in India and will be participating in events in India’s two big business hubs – Mumbai and Bengaluru.
After years of scepticism over free trade deals, India has been signing agreements or is in talks with several countries or blocs. Last year, it signed a $100bn free trade agreement with the European Free Trade Association – a group of four European countries that are not members of the European Union – after almost 16 years of negotiations.
It is also set to resume negotiations with the European Union this year.
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