After a year-long pause, India and UK resume Free Trade Agreement talks

India and the UK on Monday announced the resumption of negotiations for the proposed Free Trade Agreement (FTA), which is expected to double or even triple bilateral trade from the current USD 20 billion in the next 10 years.

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The announcement was made by Commerce and Industry Minister Piyush Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds here.

“Today, the Republic of India and the United Kingdom (UK) have resumed negotiations towards a trade deal between our two countries,” a joint statement issued after the meeting said.

After a pause of almost a year, both sides have agreed to resume talks towards a balanced, mutually beneficial and a forward-looking deal that delivers mutual growth and builds on the strengths of the two complementary economies.

The strengthening of the trading relationship has the potential to unlock opportunities for business and consumers across both nations and build further on the already deep ties, it said.

Briefing media, Goyal said the pact will be “path-breaking” and would provide huge opportunities to grow “our current USD 20 billion bilateral trade in merchandise to probably 2 or 3 X in the next 10 years”.

On the deadline to conclude the negotiations, he said it’s never “too early” or “too late” to conclude a good agreement as these pacts are for a long-term future.

“One has to crystal gaze may be 20-30-50 years into the future and make a robust agreement which is a win-win situation for both sides and therefore neither should we rush into things, but it’s always to conclude fast. So we will have speed but not haste,” he added.

Reynolds said it is the top priority of the UK and such agreements are about the long-term future.

Asked whether the negotiations for the bilateral investment treaty (BIT) would be concluded along with the FTA, Goyal said the two countries are actively negotiating at three different fronts -- FTA, BIT, and a Double Contribution Convention Agreement.

“And all three are in parallel and conjoint with each other,” he said.

Goyal also said that immigration has never been a part of trade negotiations anywhere in the word and India has “never ever” discussed immigration in any FTA negotiations.

On this, Reynolds said that the UK welcomes “the huge and important relationship we have with people coming from India to UK whether to study, whether to be part of the businesses and obviously business mobility is a separate issue to immigration”.

Goyal added that in several countries, including the US, UK, Canada, New Zealand and Australia, Indian students travel for education.

In almost all these countries, to incentivise education, business and attract more people, countries “do give a certain period of time for students to gain practical experience to work in their country but that is short-term business work visas. It has nothing to do with immigration as such,” he added.

The India-UK FTA negotiations were launched on January 13, 2022.

The agreement is aimed at boosting bilateral trade and investments.

In such pacts, two countries either eliminate or significantly reduce customs duties on maximum goods traded between them. They also ease norms for promoting trade in services and bilateral investments.

The bilateral trade between India and the UK increased to USD 21.34 billion in 2023-24 from USD 20.36 billion in 2022-23.

The United Kingdom is the sixth largest investor in India. The country has received USD 35.3 billion FDI during April 2000 and September 2024.