India-UK to resume free trade agreement talks after year-long pause
What's the story
India and the United Kingdom are set to resume negotiations for a Free Trade Agreement (FTA) after a year-long hiatus.
The move comes as both countries look to bolster their economic ties, amid increasing global trade tensions.
The last round of talks was held in March 2024 but was suspended due to UK general elections in May 2024.
Now, with a high-ranking British delegation arriving in New Delhi on Sunday, talks are likely to resume soon.
Delegation visit
UK delegation's visit to India signals resumption of FTA talks
UK Business and Trade Secretary Jonathan Reynolds will begin a three-day visit to India on Sunday.
He will meet Commerce and Industry Minister Piyush Goyal on Monday, paving the way for an official announcement on the resumption of FTA negotiations.
The UK delegation will also include Minister of State for Investment Poppy Gustafsson. However, she won't be directly involved in the FTA talks.
Trade between the two nations has risen from $17.5 billion in FY22 to $21.34 billion in FY24.
Negotiation points
Worker mobility and tariff reductions on agenda
Worker mobility was a major sticking point in the last round of India-UK FTA talks under former UK PM Rishi Sunak.
India had initially sought unrestricted movement for skilled professionals under the deal but is now expected to take a more flexible approach.
The talks may also include tariff reductions on Scotch whisky, however, India is unlikely to offer the same concessions as Australia under the India-Australia Economic Cooperation and Trade Agreement.
Potential impact
UK's carbon border adjustment mechanism could impact FTA
Experts have warned that the UK's planned implementation of its Carbon Border Adjustment Mechanism (CBAM) from January 2026 could create an uneven playing field in the proposed FTA with India.
Ajay Srivastava, former trade service official and founder of economic think tank Global Trade Research Initiative (GTRI), said, "Once CBAM is in place, UK goods entering India under the FTA may enjoy zero tariffs, while Indian exports—such as steel and other products—could face equivalent carbon taxes."