The UK is set to resume negotiations with India over a free trade agreement in the new year, following a break in discussions due to the recent elections in both nations, as confirmed by Prime Minister Keir Starmer’s office on Monday.
Prime Minister Starmer aims to foster a “new strategic partnership” with India, with a focus on strengthening cooperation in key areas such as security, education, technology and climate change. This comes after Starmer’s meeting with Indian Prime Minister Narendra Modi at the G20 summit in Brazil, where both leaders discussed the path forward for UK-India relations.
“A new trade agreement with India will generate significant economic benefits, supporting jobs and prosperity across the UK,” said Starmer, whose Labour Party assumed office in July.
In addition to his discussions with Prime Minister Modi, Starmer also engaged with Chinese President Xi Jinping, urging the establishment of more “consistent and durable” ties between the two countries, particularly in areas such as trade, the economy, and climate change.
With a commitment to securing the fastest sustained economic growth within the G7, Starmer is positioning the UK to leverage trade agreements with key global partners. The Organisation for Economic Co-operation and Development (OECD) has predicted that UK growth in 2025 will be the lowest among G7 nations, emphasising the importance of these international negotiations.
The previous Conservative administration had engaged in extensive trade talks with India, but these discussions stalled in March due to the Indian elections. A British official stated that finalising an agreement ahead of the Indian elections was not feasible.
Bilateral trade between the UK and India, the world’s fifth- and sixth-largest economies, was valued at £42 billion ($53.2 billion) in the 12 months leading up to June, with UK exports to India accounting for £16.6 billion.
Ahead of India’s general election earlier this year, which secured Modi a third consecutive term, there were indications that India would prioritise completing trade deals with the UK and Oman.
However, previous challenges in the negotiations have centred on issues such as India’s high import duties on British whiskey and its demand for greater visa access for Indian students and businesses.
“India remains a crucial trading partner for the UK. We are optimistic that a mutually beneficial trade agreement can be reached, benefiting both nations,” commented British Business Minister Jonathan Reynolds.
If you or your connections require legal advice, please contact Jayesh Jethwa or fill out our enquiry form below.
