India-UK FTA: Prime Minister Narendra Modi Tuesday met his British counterpart Keir Starmer on the sidelines of the G20 Summit in Rio de Janeiro, Brazil, and the leaders decided to resume negotiations to conclude the pending India-UK free trade agreement (FTA). The talks stalled after the UK underwent elections and the Starmer administration came to power. 

This was the first meeting between Modi and Starmer after the latter assumed charge as British Prime Minister in July this year. During the meeting, India also announced the establishment of two new Consulates General of India in the United Kingdom, in Belfast and Manchester.

In a post on X, Modi said he had “an extremely productive meeting with Prime Minister Keir Starmer in Rio de Janeiro”. 

“For India, the Comprehensive Strategic Partnership with the UK is of immense priority. In the coming years, we are eager to work closely in areas such as technology, green energy, security, innovation and technology. We also want to add strength to trade as well as cultural linkages, he added. 

The Ministry of External Affairs said in an official statement on the meeting that “both leaders underlined the importance of resuming the free trade agreement negotiations at an early date and expressed confidence in the ability of the negotiating teams to address the remaining issues to mutual satisfaction, leading to a balanced, mutually beneficial and forward looking free trade agreement”.

According to a readout issued by the UK, London is “committed” to having the FTA with India in order to keep up the pace of economic growth in Britain, and also because India is  one of the fastest growing economies in the world. 

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This assumes significance because, after the Starmer government came to power in the UK, there were concerns that the FTA talks might get shelved as they may not be a priority for the current administration.

However, the talks had already hit the doldrums before Starmer’s election, due to differences between both sides on tariffs on wines and spirits and migration of skilled labour. The talks came to a standstill in March 2024.

“A new trade deal with India will support jobs and prosperity in the UK – and represent a step forward in our mission to deliver growth and opportunity across our country,” said Starmer.

UK Business and Trade Secretary Jonathan Reynolds said: “India is the fifth largest economy in the world and a vital trading partner for the UK. We believe there is a good deal to be done here that works for both nations.”

“Whether it’s lowering Indian tariffs to help British firms export to this dynamic market or boosting investment which already supports over 600,000 jobs across both countries, striking a deal is important to deliver this government’s core mission of driving economic growth,” Reynolds added.

Roadmap 2030

The proposed India-UK FTA is a key aspect of the India-UK Roadmap 2030.

India and the UK launched talks for an FTA in January 2022 under former British PM Boris Johnson. At the time, both sides had decided to conclude talks by October 2022. The decision to have a trade pact between India and the UK was taken post-Brexit, when the country came out of the European Union (EU), thereby losing access to the bloc’s single market. 

However, due to disagreements over reduction of tariffs on whiskey and scotch, and enhancement of visas for Indian workers and students as well as rapid political changes in the UK, the deadline got delayed. So far, 13 rounds of talks have taken place between both sides.

The UK is also set to join the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) on December 15.