India and the United Kingdom (UK) will ‘relaunch in the new year’ talks for a free trade agreement (FTA), following months of pause due to general elections in both countries, according to a statement from the UK government.
“A new trade deal with India will support jobs and prosperity in the UK – and represent a step forward in our
mission to deliver growth and opportunity across our country,” UK Prime Minister Keir Starmer said in a statement.
An announcement was made following a meeting between Prime Minister Narendra Modi and his British counterpart Keir Starmer on the sidelines of the G-20 summit in Brazil. It was the first meeting between the two leaders.
“Both leaders underlined the importance of resuming the Free Trade Agreement negotiations at an early date and expressed confidence in the ability of the negotiating teams, to address the remaining issues to mutual satisfaction, leading to a balanced, mutually beneficial and forward looking Free Trade Agreement,” said India’s Ministry of External Affairs in a statement on Tuesday.
During their meeting, Modi and Starmer directed their ministers and senior officials to work towards faster implementation of the various understandings that form part of the India-UK Comprehensive Strategic Partnership.
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India and the UK have been negotiating a trade agreement since January 2022. A deal was ambitiously scheduled to be concluded by Diwali in October 2022 but was delayed when Boris Johnson resigned as UK’s Prime Minister.
Thereafter, both sides made substantial progress when Rishi Sunak became UK’s leader after Johnson, but FTA talks were delayed due to elections in both nations.Modi was sworn in for his third term as Prime Minister in June and a new Labour government in the UK took over in July.
As many as 14 rounds of negotiations have taken place between both countries till now. The last round of negotiations took place in March, before the pre-election model code of conduct kicked in mid-March onwards in India. Thereafter, FTA deliberations on the outstanding issues, including areas related to services were held in May.
“The Business and Trade Secretary announced the UK’s commitment to relaunching talks with Free Trade Agreement partners in July…The Department for Business and Trade will soon unveil the government’s new Trade Strategy, aligned with the Industrial Strategy, to help inform future trade talks and achieve long-term sustainable, inclusive and resilient growth through trade,” the statement said.
The UK is India’s 14 largest trade partners and the fourth largest export market. In the first six months of this financial year, bilateral trade between both countries stood at $11.5 billion.
For the UK, a trade agreement with India is essential in its efforts to establish a post-Brexit trade relationship with the world.
Trade Talks
India-UK Free Trade Agreement (FTA) negotiations began in January 2022
14 rounds of negotiations held so far
Both sides struggled to resolve disputes under the Bilateral Investment Treaty
Key demands
By India: Greater access for skilled professionals in the UK services sector
By UK: Reduced tariffs on whisky and automobiles; opening India's legal, architectural, and financial services sectors
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