Ministers are set to resume negotiations with India this week in a bid to secure a multibillion-pound free trade agreement aimed at revitalizing the UK’s stagnant economy. Jonathan Reynolds, the business and trade secretary, arrived in Delhi on Sunday to meet with his Indian counterpart, Piyush Goyal, marking their first meeting since Labour’s election victory. This visit initiates the 15th round of trade discussions with India, a rapidly growing economy of 1.4 billion people, which had been paused in May when Rishi Sunak called for a general election.
Previous Conservative prime ministers have sought to finalize a trade deal with India, viewed as one of the most significant opportunities post-Brexit. Reynolds emphasized to the Guardian that finalizing the agreement is a “top priority” for him and expressed his willingness to make difficult decisions. He noted, “We’ve seen trade secretaries come and go, and while their efforts have been sincere, it’s no secret that British businesses have nothing to show for it in terms of a final product. They need a trade deal they can actually use to cut costs, grow their business, and expand in the massive Indian market. That’s what this government is going to get them.”
During his trip, Reynolds and Goyal will visit BT India’s office in Gurugram, while Poppy Gustafsson, the investment minister, is expected to engage with businesses in Mumbai and Bengaluru. Saif Malik, the chief executive of Standard Chartered, which has been active in India for over 160 years, highlighted the significant opportunities a trade deal could present for businesses. He stated, “Whether it’s improved access to India’s growing consumer market, opportunities in manufacturing, infrastructure and innovation, or collaboration in financial and professional services, the relaunch of trade talks can unlock even greater trade, investment, and prosperity across the UK-India corridor.”
The UK and India rank as the sixth and fifth largest global economies, respectively, with a trade relationship valued at £41 billion. India is projected to become the third-largest economy in the world by 2028. However, the country is known for its challenging trade negotiations. Narendra Modi’s government recently signed a £79 billion agreement with the European Free Trade Association after 16 years of discussions. Donald Trump remarked this month that Modi is a “much tougher” negotiator than he is.
Boris Johnson and Liz Truss both set Diwali deadlines for reaching agreements but were unable to finalize them. Under Sunak, negotiators came close to concluding a deal, but this was halted when the UK election was announced. The UK has requested lower tariffs on goods such as cars and whisky, along with increased access for British lawyers and financial services firms to the Indian market. In exchange, India has sought expedited processing arrangements for its companies sending workers to the UK.