The UK and India are on the cusp of striking a free trade agreement, with consensus reached on “25 of 26 matters”.

That’s according to three people “familiar” with a briefing given to British business leaders yesterday afternoon in 10 Downing Street, Politico reports.

The briefing took place after a two-day sprint in the negotiations, with both parties accelerating the process amid the backdrop of increased US tariffs on both countries.

India’s commerce minister, Piyush Goyal, has been in London this week to discuss the deal with his UK counterpart, Jonathan Reynolds, and spoke at yesterday’s briefing.

Outstanding issues

Goyal was joined on the briefing call by the director general of the UK’s Department for Business and Trade, Amanda Brooks.

Brooks said that issues still to be resolved included a possible carve-out for India from the UK’s carbon border adjustment mechanism, which is still in development, as well as descriptions of Indian territory in the legal text of the deal, and a sunset clause in a parallel investment treaty.

Earlier this week, Bloomberg reported – ahead of Goyal’s visit – that other unresolved issues included data localisation laws and market access for UK banks.

These final issues are not expected to derail the last stages of the talks, a UK official told Bloomberg, though neither side is yet committing to a deadline or announcement date.

‘Make trade cheaper’

"The government's committed to doing the right deal with India, which will improve access for UK businesses, cut tariffs and make trade cheaper and easier," a spokesperson for UK prime minister Sir Keir Starmer told Reuters.

It is expected that a deal could cut duties for various UK exports to India including cars, Scotch whisky and agricultural goods.

Exemptions from social security contribution requirements for Indian workers in the UK has also been a key demand from the Indian side.

Goyal has said that this will be covered in a separate treaty, and it is thought that there will be some mobility clauses within the main trade deal, making it easier for professionals to conduct work trips between the two countries.

Long-awaited

A trade deal between the UK and India has been long in the works, with negotiations beginning under former Conservative prime minister Boris Johnson in 2022.

Despite initially ambitious deadlines coming and going, successive governments have sought to continue the negotiations, with Labour chancellor Rachel Reeves recently saying that an India agreement was a key part of the Starmer administration’s ‘Plan for Change’.

“In a changing world, it is imperative we go further and faster to kickstart economic growth,” she said.

“We have listened to British businesses, which is why we’re negotiating trade deals with countries across the world, including India, so we can support them and put more money in people’s pockets as part of our Plan for Change.”