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Uk-India trade talks set to re-launch in the new year, key issues remain

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New trade agreement with India could open up valuable markets, but negotiations face challenges over visas and student fees

Downing Street has confirmed that UK-India free trade talks will resume in the new year, following a meeting between Sir Keir Starmer and Indian Prime Minister Narendra Modi at the G20 summit in Brazil. The talks, which have been on hold since 2022, are expected to focus on key economic sectors, including British cars, Scottish whisky, and financial services, with the potential to unlock billions in trade.

India is poised to become the third-largest global economy by 2050, making it an increasingly vital partner for the UK post-Brexit. Currently, UK exports to India are valued at £16.6 billion, and the trade relationship between the two countries reached £42 billion in the 12 months leading up to June 2024. However, despite numerous rounds of negotiations, key sticking points remain, particularly around relaxing visa rules and reducing fees for Indian students and professionals who wish to study or work in the UK.

Sir Keir Starmer, in his meeting with Modi, highlighted the importance of boosting economic growth and said that a new trade agreement with India would create jobs and prosperity in the UK. He also noted that the talks would encompass areas beyond trade, including security, education, technology, and climate change, reflecting the broad scope of the relationship between the two nations.

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Business and Trade Secretary Jonathan Reynolds referred to India as a “vital trading partner,” emphasizing the potential for lowering Indian tariffs on UK exports and boosting investment, which already supports over 600,000 jobs in both countries. He expressed confidence that a fair deal could benefit both sides, helping the UK achieve its goal of driving economic growth.

The UK government’s focus on trade is also evident in its ongoing negotiations with other countries and trading blocs. Following the election of the Labour government in July, the UK has been in talks with Switzerland, South Korea, and the Gulf Cooperation Council, and will join trade discussions for the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) in mid-December.

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