UK-India Trade Negotiations Set to Resume in 2025: Details Awaited

The UK and India have confirmed the resumption of Free Trade Agreement (FTA) negotiations in 2025, following a pivotal meeting between Prime Ministers Narendra Modi and Keir Starmer at the G20 Summit in Brazil. This significant step reflects the commitment of both nations to enhance bilateral trade and cooperation, while addressing long-standing contentious issues.

Key Outcomes of Modi-Starmer Meeting

During their discussions, both leaders underscored the urgency of resuming FTA talks to achieve mutually beneficial resolutions. The UK emphasized its focus on strengthening its domestic economy through enhanced international trade. Both sides agreed to expand cooperation in various critical areas such as security, technology, climate change, and education.

Addressing Key Issues in Trade Negotiations

Prime Minister Modi highlighted the need to address the issue of economic offenders from India residing in the UK. In addition, both nations agreed to make progress on migration and mobility matters. The UK welcomed India’s decision to open two new Consulates General in Belfast and Manchester, signaling a positive step in fostering bilateral ties.

Trade Growth Between India and the UK

Trade data highlights a strong economic relationship between the two nations. From April to September 2024, India’s exports to the UK grew by 12.38%, reaching $7.32 billion compared to $6.51 billion during the same period in 2023. Major exports included mineral fuels, machinery, precious stones, pharmaceuticals, chemicals, and iron and steel, which together accounted for nearly 69% of total exports.

Previous Progress and Challenges in Negotiations

India and the UK launched FTA negotiations on January 13, 2022, with 14 rounds of discussions completed by the end of 2023. Out of 26 policy areas, 21 were finalized, covering goods, services, investments, and intellectual property rights. However, the talks were paused in March 2024 due to both nations preparing for general elections.

Contentious issues remain, including the UK's request for duty concessions on products like scotch whisky, chocolates, lamb meat, and electric vehicles. The Indian alcohol industry has opposed such concessions, citing potential harm to domestic producers. Meanwhile, India seeks greater access for IT/ITeS and healthcare professionals in the UK, particularly amidst growing economic concerns and opposition to immigration in Britain.

Bilateral Investment Treaty (BIT) and Future Focus Areas

Alongside the FTA, both nations are negotiating a Bilateral Investment Treaty (BIT) to attract and protect cross-border investments. This agreement aims to establish a framework for dispute resolution and create a favorable investment environment.

Looking ahead, the 2025 FTA negotiations will build upon previous progress, aiming to resolve critical issues and unlock the potential for deeper economic ties. Both sides have expressed optimism about achieving a fair and balanced agreement that benefits both economies.

Strengthening Bilateral Relations Beyond Trade

The UK and India have also prioritized enhancing collaboration in non-trade areas, including climate action, security, and technology. This reflects a comprehensive approach to their strategic partnership, aiming to address global challenges while fostering mutual growth.

Conclusion

The decision to resume UK-India FTA talks in 2025 marks a significant step forward in their bilateral relationship. With trade between the two countries already growing steadily, the upcoming negotiations are expected to further solidify economic ties while resolving long-standing challenges. As both nations prepare for the next phase of discussions, the focus will remain on achieving a balanced and mutually beneficial agreement.