India is seeking to expand trade with the United Kingdom (UK) by two to three times in the coming years through more flexible tariffs, Commerce and Industry Minister Piyush Goyal said on Monday. Following discussions with Jonathan Reynolds, the UK’s Secretary of State for Business and Trade, both sides reaffirmed their commitment to accelerating negotiations on a Free Trade Agreement (FTA).
While talking about allegations of India having very high tariffs, Goyal stated, “Many of the tariffs that India has are really to protect us from non-market economies, non-transparent economies or economies, known for predatory pricing or dumping of goods. And I think, between the United Kingdom and India, we have much more flexibility and ability to significantly reduce tariffs to make business more competitive between the two countries."
The UK and India initiated negotiations for a Free Trade Agreement (FTA) on January 13, 2022, with the objective of strengthening bilateral trade and investment flows. The countries have held more than a dozen rounds of negotiations since 2022, but yet to conclude the FTA negotiations. Such agreements typically involve the reduction or removal of customs duties on a wide range of goods while easing regulations to facilitate trade in services and cross-border investments.
In addition to the FTA, discussions will encompass a double taxation avoidance pact, known as a totalisation agreement, as well as a Bilateral Investment Treaty (BIT). Nearly two years ago, India urged the UK to explore the possibility of a social security arrangement. While business mobility remains on the agenda, immigration falls outside the scope of negotiations, consistent with other trade agreements.
When questioned about immigration as part of the trade discussions, Piyush Goyal clarified that it has never been included in trade negotiations. However, he acknowledged the growing trade relationship between the two nations and assured that business visa processing would be expedited.
“If we expand our trade and investments, obviously, we will have to be faster and more liberal in our issuances of visas,” said Goyal.
Both sides have agreed to resume negotiations towards a balanced, mutually beneficial and a forward-looking deal that delivers mutual growth and builds on the strengths of the two complementary economies that will create a ‘win-win for both nations’.
“India is a vital partner for UK in an increasingly volatile and multipolar world. We have kickstarted negotiations for UK and India FTA again. Through these talks we want to secure a mutually beneficial agreement,” said Jonathan Reynolds.
Bilateral trade between the two nations grew to $21.34 billion in the 2023-24 financial year, up from $20.36 billion in 2022-23. The UK remains a key investor in India, ranking as the sixth largest, with foreign direct investment (FDI) inflows totaling $35.3 billion between April 2000 and September 2024.
