India-UK likely to resume FTA talks after year-long pause

With bilateral trade rising from $17.5 billion in FY22 to $21.34 billion in FY24, both nations remain committed to finalizing a comprehensive trade pact.

India and the UK are set to revive negotiations for a Free Trade Agreement (FTA) after nearly a year, with a top British delegation arriving in New Delhi on Sunday, Mint reported.

Talks had stalled in May 2024 ahead of the UK general elections but are now being restarted as both nations seek to strengthen economic ties. According to Mint, India is likely to soften its stance on workers’ mobility, considering the new British government’s reservations under Prime Minister Keir Starmer.

UK Business and Trade Secretary Jonathan Reynolds is scheduled to begin a three-day visit to India on Sunday and is expected to meet Commerce and Industry Minister Piyush Goyal on Monday. An official announcement on the resumption of negotiations is likely to follow the meeting, Mint reported, citing a source.

The delegation will also include UK Minister of State for Investment Poppy Gustafsson, though she will not be directly involved in the FTA discussions.

The last round of India-UK FTA talks took place in March 2024, with worker mobility emerging as a key sticking point under former UK Prime Minister Rishi Sunak. Mint reported that India, which had previously sought unrestricted movement of skilled professionals as part of the deal, may now take a more flexible stance.

Discussions may also extend to tariff reductions on Scotch whisky, though India is unlikely to offer the same concessions it granted to Australia. Under the India-Australia Economic Cooperation and Trade Agreement (ECTA), India slashed tariffs on Australian wine, with rates on bottles priced above $5 falling from 150% to 100% and further reductions planned over a decade.

With bilateral trade rising from $17.5 billion in FY22 to $21.34 billion in FY24, both nations remain committed to finalizing a comprehensive trade pact.

A commerce ministry spokesperson did not respond to emailed queries. Moneycontrol could not independently verify the report.