The UK and India have resumed negotiations towards a trade agreement, as British ministers landed in the south east Asian nation on Monday eyeing a deal to help grow the economy.
Business & trade secretary Jonathan Reynolds is in New Delhi to resume talks with Indian commerce minister Piyush Goyal, which will focus on a “modern economic deal”.
He said on Tuesday that a free trade agreement between the two countries would be “genuinely beneficial” to both.
Reynolds added securing a deal with India was a “no-brainer and a top priority for me and this government”.
The discussions also come amid tension over US president Donald Trump’s threats to impose tariffs on goods from around the world, forcing governments to look for business elsewhere.
A UK-India free trade agreement has been hailed as one of the biggest post-Brexit rewards, as the latter is poised to become the world’s third-largest economy by 2028.
Britain would benefit from a reduction in tariffs – particularly on scotch whisky exports, which are currently seeing growing demand in India despite facing an eye-watering levy of 150%.
The Scotch Whisky Association has previously said a tariff reduction could bolster the value of exports by £1bn over five years.
The NFU has also pointed to the potential growth of meat and dairy exports, along with some British fruit & veg.
Read more: Labour will target trade deals with Gulf countries and India
Trade discussions between Britain and India have been on-and-off in recent years, with former prime minister Boris Johnson famously claiming in 2022 that he would land a deal “by Diwali” that year.
He ultimately failed to do so, as did his successor Rishi Sunak despite talks being resuscitated a handful of times under his premiership.
But the Labour Party is now pushing for a deal that will help deliver its growth agenda. This is the first time both negotiating parties have formally got around the table under the current government.
Prime minister Keir Starmer has described it as “a “step forward in our mission to deliver growth and opportunity across our country”.
The UK and India are currently the sixth and fifth-largest global economies respectively, with a trade relationship worth £41bn and investment supporting over 600,000 jobs across both countries, according to the government.
The proposed FTA could double or triple trade in a decade. It could also “unlock new opportunities for businesses and consumers in all regions and nations of the UK, support jobs, boost wages, and back the high-growth sectors identified in the government’s upcoming Industrial Strategy, such as advanced manufacturing, clean energy, financial services, and professional and business services”, the two governments said in a joint statement.
Securing new trade agreements is a priority for Reynolds’ business and trade department, who were tasked with boosting business with other countries amid a major slump in British exports since Brexit.
“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,” Reynolds said.
Richard Heald, chair of the UK India Business Council, said the FTA conversations would “catalyse collaboration beyond into other areas too”.
“Importantly, it will signal the UK and India are strategic partners. This is truly an exciting chapter of the UK-India partnership.”
No comments yet