India and the UK have resumed discussions on a free trade agreement after a hiatus of almost a year due to general elections in both countries. Jonathan Reynolds, the UK’s business and trade secretary, met with his Indian counterpart Piyush Goyal in Delhi to kickstart the two-day talks. The focus of the discussions was on advancing the negotiations and ensuring that the deal is balanced, ambitious, and mutually beneficial, as stated by Goyal. Despite more than a dozen rounds of negotiations since 2022, the two countries have yet to reach an agreement.
Some of the key issues at hand include high tariffs on Scotch whisky in India and the need to relax fees and visa regulations for Indian students and professionals entering the UK. This round of talks comes after the Labour Party assumed power in the UK, with Reynolds emphasizing that securing a deal is a top priority for the government. He highlighted that growth would be the guiding principle in the trade negotiations with India, expressing excitement about the opportunities present in the dynamic market. India’s trajectory to become the world’s third-largest economy in the coming years adds further significance to these discussions.
Following the meeting, the ministers held a joint press conference without setting a deadline for the conclusion of talks. Previous deadlines set by former ministers had passed without a finalized agreement. The trade talks gain renewed importance for Delhi in light of the tit-for-tat tariffs imposed by US President Donald Trump on imported goods, including those from India. Additionally, the UK is a crucial trading partner for Prime Minister Narendra Modi’s government, aiming to boost exports significantly by the fiscal year 2030.
In November of last year, an announcement was made to restart talks, with the current trade relationship between the two countries valued at £41 billion ($52 billion). A potential trade deal could unlock new opportunities in sectors such as advanced manufacturing, clean energy, and professional services. It could also pave the way for British exports like cars, Scotch whisky, and financial services to access a lucrative market in India. India is advocating for enhanced mobility for its professionals and students entering the UK, along with faster visa processing times. There are also discussions about concessions for Indian residents on business visas in the UK.
During his visit, Reynolds, along with Goyal, will visit the BT office in Gurugram, India. UK Investment Minister Poppy Gustafsson is also in India, participating in events in Mumbai and Bengaluru. India’s stance on free trade deals has evolved, with recent agreements signed with various countries and blocs. Last year, a $100 billion free trade agreement was signed with the European Free Trade Association after years of negotiations. Talks are also set to resume with the European Union this year.
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