UK will resume trade talks with India to establish a ‘new strategic partnership’

UK is set to resume discussions with India regarding a free trade agreement in the upcoming year, as announced by Prime Minister Keir Starmer’s office on Monday. This follows a hiatus in negotiations that lasted several months due to elections in both nations.

According to Starmer’s office, London aims to establish a “new strategic partnership” with India, focusing on enhancing collaboration in key areas such as security, education, technology, and climate change. This announcement came after Starmer’s meeting with Indian Prime Minister Narendra Modi during the G20 summit in Brazil.

Starmer emphasized that a new trade agreement with India would bolster jobs and economic prosperity in the UK. Since the Labour Party’s victory in July, he has been keen on fostering international relations.

Additionally, Starmer engaged with Chinese President Xi Jinping at the summit in Rio de Janeiro, urging the establishment of “consistent, durable” ties between the two countries and expressing a desire to collaborate on trade, economic matters, and climate issues.

The Prime Minister has committed to achieving the fastest sustained economic growth for Britain among the G7 nations, despite the Organisation of Economic Co-operation and Development forecasting that the UK’s growth in 2025 will be the lowest within the group.

The former Conservative administration engaged in extensive trade negotiations with New Delhi, which ultimately concluded in March without reaching an agreement. A British official indicated that finalizing a deal was not feasible prior to the Indian elections.

In the year leading up to June, the total trade between India and the UK, which are currently the fifth and sixth largest economies in the world, amounted to £42 billion ($53.2 billion), with British exports to India totaling £16.6 billion.

Following India’s general election from April 19 to June 1, which resulted in Modi securing a rare third term, government sources suggested that he would likely focus on finalizing free trade agreements with both the UK and Oman if re-elected.

Previous challenges in the trade discussions have included high import duties on British whiskey sold in India and India’s request for an increase in visas for Indian students and businesses.

“India is … an essential trading partner for the UK. We are confident that a beneficial agreement can be reached for both countries,” stated British Business Minister Jonathan Reynolds.