Jonathan Reynolds to relaunch trade deal talks with India

BUSINESS and trade secretary Jonathan Reynolds has said securing a Free Trade Agreement (FTA) with India is a key priority for the government. He described India as a “vibrant market” and highlighted its growing global economic position.

Trade negotiations, which had stalled due to election cycles in both countries last year, are set to resume in New Delhi this week.

The Department for Business and Trade (DBT) said discussions over the next two days will focus on key trade issues.

Reynolds, who arrived in New Delhi on Monday, said: “Securing a trade deal with what is soon-to-be the third biggest economy in the world is a no-brainer, and a top priority for me and this government.”

This will be the first formal round of talks under the Labour government, elected in July 2024, with Reynolds and India’s minister of commerce and industry, Piyush Goyal, leading negotiations.

“That is why I'm flying to New Delhi with our top negotiating team to show our commitment to getting these talks back on track. Only a pragmatic government can deliver the economic growth and stability that the British public and British businesses deserve, delivering on the Plan for Change,” Reynolds said.

The minister emphasised that economic growth would be the guiding principle of the discussions. “I'm excited about the opportunities on offer in this vibrant market,” he added.

Since January 2022, India and the UK have held 14 rounds of negotiations under the previous Conservative government with the aim of strengthening the estimated £41 billion-a-year bilateral trade relationship.

The DBT describes an FTA with India as a “huge economic prize,” noting that India is forecast to have the highest growth rate in the G20 for the next five years and is expected to become the world’s third-largest economy by 2028.

Saif Malik, CEO of Standard Chartered UK, said British businesses could benefit significantly from improved trade ties with India.

“Whether it's improved access to India's growing consumer market, opportunities in manufacturing, infrastructure and innovation, or collaboration in financial and professional services, the relaunch of trade talks can unlock even greater trade, investment and prosperity across the UK-India corridor,” he said.

The trade talks will take place alongside visits to businesses and institutions in India. Ministers are expected to visit the National Crafts Museum in Delhi and BT India’s office in Gurugram, one of the largest UK employers in India, to observe how UK technology and Indian talent are working together to address global challenges, the DBT said.

Richard Heald, chair of the UK India Business Council (UKIBC), said the UK government’s visit reinforced its commitment to a deeper trade and investment partnership with India.

“We are delighted to note the progress on the UK-India Free Trade Agreement negotiations. Success in the FTA will support further economic growth for the world’s fifth and sixth-largest economies. It will catalyse collaboration beyond into other areas too. Importantly, it will signal the UK and India are strategic partners,” he said.

As part of the visit, UK investment minister Poppy Gustafsson will meet investors in Mumbai and Bengaluru to promote the UK as a destination for Indian investment.

India has been the second-largest source of foreign direct investment (FDI) into the UK for five consecutive years in terms of project numbers, according to official data.

The most recent figures show a 28 per cent year-on-year increase in investment stock at the end of 2023, with two-way investments supporting more than 600,000 jobs across both countries.

For the UK, an FTA with India is expected to create new opportunities for businesses and consumers, support jobs, and boost wages.

Key sectors expected to benefit include advanced manufacturing, clean energy, financial services, and professional and business services.

Meanwhile, India is expected to seek better access to the UK market and improved mobility for its professionals as part of the negotiations.

(With inputs from PTI)