“India and the United Kingdom are set to significantly amplify their bilateral trade in the next decade, according to Indian Trade Minister Piyush Goyal. This announcement came on Monday amidst the backdrop of renewed trade negotiations, despite the looming threat of increased tariffs from US President Donald Trump.
Goyal, in a joint press conference with the UK’s Business and Trade Secretary, Jonathan Reynolds, disclosed plans to fast-track discussions on a proposed trade agreement. This includes a free trade pact and an investment treaty. However, both ministers did not directly address questions regarding the potential impact of Trump’s tariff hike orders on their negotiations.
According to a joint statement, the decision to resume trade talks came as a result of discussions between their respective prime ministers during the G20 summit in November. This event coincidentally took place just before Trump’s inauguration.
Goyal expressed optimism about the proposed free trade agreement, asserting that it could potentially triple merchandise trade with Britain within a decade. He did not provide a specific timeline for this projection. As it stands, bilateral trade in goods and services between India and Britain, which are currently the world’s fifth and sixth-largest economies respectively, amounted to £41 billion ($52 billion) in the 12 months up to September 2024.
Negotiations had previously been put on hold in March last year due to elections in both countries. India has since signed trade agreements with several countries, including the UAE and Australia, in 2022 and a pact last year with the European Free Trade Association.
Interestingly, India recently reduced tariffs on bourbon whisky from 150 per cent to 100 per cent. This move came after Trump criticized levies in the South Asian market as being “unfair”.
Key challenges in the negotiations include India’s high import duty on British whisky and its request for easier visa access for Indian firms and professionals working in Britain. Despite these hurdles, Reynolds reiterated the importance of respecting sensitivities in trade negotiations.
In response to media reports, Goyal clarified that immigration would not be part of the discussions under the trade pact. Reynolds echoed this, stating that immigration was being addressed separately from the trade talks.
These discussions are the first since the Labour Party assumed power in Britain in July last year. Reynolds emphasized that securing a deal is a top priority for his government.
Investment Minister of Britain, Poppy Gustafsson, is also expected to meet investors in Mumbai and Bengaluru to encourage Indian businesses to invest. In addition to trade and investment pacts, Goyal revealed that both countries would discuss a separate treaty on social security.”
