Substantial headway has been achieved in the developing free trade pact between the United Kingdom and India, with 90% of the negotiations reportedly concluded, said British authorities during a confidential meeting with companies earlier this week, as reported by The Guardian. This information was reiterated during a conversation involving representatives from the UK Department for Business and Trade and business heads on Tuesday, when they were advised that crucial sections of the accord had been finalized.
But not everything is signed off yet. Sticking points remain—especially around tariff rules for whisky, automobiles, and pharmaceutical products.
Mobility breakthrough unlocks progress
A significant obstacle related to mobility and visa accessibility for Indian professionals has allegedly been "mostly addressed," according to a government source speaking to The Guardian.“Almost there. Closer than we have ever been before, yet discussions at the governmental level can be double-edged swords,” the source noted, encapsulating the guarded hope within Whitehall circles.
The mobility issue has long been one of the more delicate parts of the talks, with India pushing for better movement of its skilled workforce. Resolving it could help unlock broader cooperation across services, investment, and digital trade.
Big wins for whisky and cars on the horizon
Should the deal close, it is expected to bring steep tariff cuts for UK exports such as Scotch whisky and luxury vehicles—two of the hardest-hit sectors by Donald Trump’s protectionist tariffs in the United States.Those reductions would give British producers improved access to India’s expanding consumer market, home to more than 1.4 billion people. The automotive and beverage industries are counting on that growth.
This pact similarly intends to reinforce pharmaceutical supply chains, which is yet another crucial sector where both countries share intersecting priorities.
Investment treaty talks advance
The unrestricted trade pact is just one of several agreements currently being discussed. Simultaneously, both nations are also engaged in talks over a bilateral investment treaty aimed at providing legal protections for UK-India investments.This was a central theme during high-level meetings this week. On Tuesday night, India’s Finance Minister Nirmala Sitharaman attended a working dinner with Labour’s Rachel Reeves and party leader Keir Starmer.
The following day, Sitharaman met with UK Trade Secretary Jonathan Reynolds, who had previously traveled to New Delhi in February to resume official talks.
Reeves said, “It is imperative we go further and faster to kickstart economic growth,” pointing to the urgency of finalising deals with partners like India.
Shared optimism from ministers
At a business event hosted by the Indian High Commission in London on Tuesday, Sitharaman said India was accelerating its trade outreach due to rising global instability. “Global uncertainties are multiplying by the day,” she warned.However, she ended on an optimistic note following her discussions with Reynolds. "There is a strong feeling of positivity and commitment to finalize the UK-India agreement promptly," she informed journalists on Wednesday.
After the meetings, the ministers from both sides unveiled a fresh set of export and investment deals worth £128 million, indicating that their deeper economic relationships remain unaffected irrespective of the ultimate timeframe.
The tech sector's top figures added their backing as well. Keshav Murugesh, the CEO of the major outsourcer WNS, commented, "Strengthening the relationship between our countries will boost innovation and create high-skilled employment opportunities." This comes as his company plans to enlarge its offices in London.
Executives from various industries have consistently advocated for a more streamlined and dependable trading system with India, recognizing its status as one of the quickest expanding major economies worldwide.
The imposition of border taxes continues to be a contentious request.
Even with recent advancements, several politically sensitive requests remain under discussion. Among these, one of India’s key demands is an exemption from the United Kingdom’s upcoming carbon border adjustment mechanism (CBAM).The proposed tax aims to be imposed on imported products with high carbon footprints, such as fertilizer and steel. It forms part of the UK's comprehensive approach to safeguard local industries while still achieving environmental targets.
India, highlighting its status as a developing nation, has requested an exclusion from the tax. Such an exemption might spark controversy, especially among British steel manufacturers who view the CBAM as a means to create fair competition.
A Brexit benefit, still within grasp
In January 2022, the UK initiated free trade discussions with India, presenting the deal as potentially one of the biggest successes for the country’s post-Brexit period.However, multiple shifts in governmental leadership along with political holdups have hindered advancements, as former Conservative-led governments consistently failed to meet their self-imposed timelines.
Currently, as both nations move closer than ever before towards a concluding document, the expectation is that the political determination from each side will remain strong enough to finalize the agreement.
What comes next will depend on how the remaining details are settled—and how fast.