India and the UK are poised to restart negotiations on a free trade agreement, according to Prime Minister Narendra Modi’s office, following his meeting with British Prime Minister Keir Starmer at the G20 Summit in Brazil.
The discussions, initially launched in 2022 with the goal of doubling bilateral trade by 2030, had stalled. However, trade between the two nations was valued at $42 billion in the year leading up to June.
Meeting for the first time in Rio de Janeiro, Modi and Starmer agreed to renew efforts to strengthen cooperation and resume talks. Both leaders emphasized the importance of quickly restarting negotiations and expressed confidence in resolving outstanding issues.
The trade talks are scheduled to recommence early next year, as announced by Starmer’s office. The UK is seeking a strategic partnership with India encompassing security, education, technology, and climate change.
Modi emphasized the priority of their strategic partnership, expressing eagerness to collaborate in technology, green energy, security, and trade.
Negotiations had been delayed due to political changes in the UK and elections in both countries. With a more stable government in the UK and bipartisan support, the conditions are favorable for resuming discussions, noted Shairee Malhotra from the Observer Research Foundation.
Key issues remain, such as India’s desire for a liberalized visa regime and the UK’s concerns over import duties on whiskey. However, there is strong political will on both sides to overcome these hurdles.
Geopolitical factors also play a significant role, with both nations keen to diversify trade away from China, especially in light of Donald Trump’s recent victory in the US presidential election. The FTA could thus gain additional importance in enhancing trade, investment, and job creation.
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