New Delhi, February 24, 2025 – After a year-long pause, India and the United Kingdom (UK) have officially resumed negotiations on a free-trade agreement (FTA), a bilateral investment treaty (BIT), and a social-security agreement. Commerce Minister Piyush Goyal and UK Business and Trade Secretary Jonathan Reynolds launched the three-track discussions in New Delhi on Monday, underscoring their commitment to strengthening economic ties.
A Renewed Push for Trade Expansion
Talks on an India-UK FTA were first initiated nearly three years ago under former UK Prime Minister Boris Johnson, with an initial goal of finalizing the deal within nine months. However, political instability in the UK, unresolved differences, and general elections in both countries delayed negotiations. The deal is expected to double or even triple bilateral trade, currently valued at $20 billion, over the next decade.
While no deadline has been set for the conclusion of talks, Goyal emphasized that the trade agreement would be finalized with “speed, not haste,” while Reynolds reiterated that the FTA remains a priority for the UK and that such agreements require a long-term approach.
According to a joint statement, negotiators from both sides have been directed to work together to resolve outstanding issues in the coming months.
Investment and Social Security Agreements in Focus
Apart from the FTA, both nations are keen on finalizing a Bilateral Investment Treaty (BIT) and a Social-Security Agreement (SSA). While the BIT has been a long-standing point of contention, it remains a key priority for London. The Indian Ministry of Finance is leading the negotiations on the BIT.
The Social-Security Agreement (SSA) has been a crucial demand from India, ensuring that skilled Indian professionals working in the UK are not required to make social security contributions in both countries. India first proposed the SSA two years ago, but formal negotiations only began on Monday. The UK is India’s largest services export market after the United States, making this agreement vital for Indian businesses and professionals.
Key Sticking Points in the Negotiations
While both countries seek an ambitious and balanced trade deal, several thorny issues remain:
- UK’s Market Access Demands: The UK seeks greater access to India’s telecommunications, legal, and financial services sectors.
- India’s Priorities: India is pushing for a liberalized migration policy for skilled professionals to facilitate easier mobility.
- Tariff Reductions: The UK has called for lower tariffs on whiskey and automobiles, while India is focused on maintaining fair trade protections against predatory pricing.
- Rules of Origin & Intellectual Property Rights (IPR): Disagreements persist on defining product origins and IP protections.
Goyal defended India’s tariff policies, stressing the need to protect domestic industries from unfair trade practices and non-transparent economies. He also argued that tariff reductions would be considered strategically to maintain competitiveness.
Business Mobility vs. Immigration
A more liberal visa regime for businesses and professionals remains a key issue in the discussions. While India has never included immigration in FTA talks, Goyal stressed the need for enhanced business mobility.
Reynolds clarified that business mobility is a separate issue from immigration, indicating that the UK is open to discussions on professional movement without broader immigration commitments.
Future Prospects
The renewed trade negotiations come amid global trade tensions, with rising tariff disputes between major economies. The UK’s push for an India trade deal reflects its broader strategy to expand post-Brexit trade partnerships.
Goyal highlighted India’s expanding network of FTAs with developed nations, reaffirming that the India-UK deal will create mutual opportunities and drive significant investment flows.
As negotiations progress, the coming months will be crucial in determining whether India and the UK can bridge their differences and finalize a historic trade agreement.
