SUMMARY
- Commerce Minister Piyush Goyal expected to visit UK next month as India–UK FTA negotiations enter final phase.
- 14 rounds of talks completed, with core market access issues prioritized for early harvest agreement.
- India also progressing on BIT and Double Taxation treaty with UK amid global realignment post-US–China tariff war.
Final-Lap Diplomacy: Goyal Heads to UK as India–UK FTA Nears Completion
New Delhi | April 27, 2025 — Within weeks of Finance Minister Nirmala Sitharaman’s visit to the UK, Commerce Minister Piyush Goyal is now expected to travel to London in May for critical final-stage discussions on the long-pending India–UK Free Trade Agreement (FTA).
A senior government official confirmed that the talks are moving faster than expected, and a 15th round may not be needed, as negotiators from both countries have “substantially closed the gap” on most trade issues.
“Negotiations are progressing well. We’re now aligning technical contours and finalising concessions. Political-level momentum is high,” the official told UnreadWhy.
Good interaction with Mr. Chandrajit Banerjee, Director General of @FollowCII, at the 8th India-US Forum today.
— Piyush Goyal (@PiyushGoyal) April 22, 2025
Spoke about the promising avenues to further deepen the India-US partnership. Enhanced cooperation in technology, energy, and defence will pave the way for our shared… pic.twitter.com/LyO7lidU9S
What’s on the Table: FTA, BIT, and Double Taxation Treaty
India and the UK are simultaneously working on three major trade and investment agreements:
- FTA (Free Trade Agreement) — led by the Commerce Ministry.
- BIT (Bilateral Investment Treaty) — led by the Finance Ministry.
- Double Taxation Avoidance Agreement — under review to prevent tax-related duplication for businesses operating in both countries.
Finance Minister Sitharaman’s recent UK visit included high-level meetings with Treasury and business leaders, reportedly to iron out remaining issues in the investment treaty framework. The BIT, in particular, is undergoing a revamp to move beyond the protectionist 2016 model, which heavily favoured the Indian state in investor–state disputes.
Why It Matters: Trade Winds Shift Amid Global Realignments
The India–UK FTA gains importance as major economies scramble to reconfigure trade routes amid:
- Trump’s aggressive US tariff regime causing ripple effects globally.
- Global supply chains diversifying away from China.
- A broader pivot in Western trade toward ‘trusted partners’ in the Indo-Pacific.
India is simultaneously negotiating:
- An FTA and BIT with the European Union, expected to be signed within 2025.
- A new investment framework with the European Free Trade Association (EFTA), which has pledged $100 billion in FDI over the next 15 years.
“This is about long-term economic positioning,” said a former Indian trade negotiator. “FTAs now come with strategic alignment.”
Sticking Points: Labour, Environment and What India Wants Deferred
One reason the India–UK deal hasn’t been signed yet: Western countries’ insistence on including labour rights and environmental standards in the agreement.
In response, India is pushing for an “early harvest agreement” — a mini-deal that would:
- Cover core trade issues like tariff reduction, market access, and rules of origin.
- Defer contentious chapters like labour protections and carbon-linked tariffs to later stages.
This pragmatic approach mirrors India’s stance in talks with the EU, EFTA, and Australia, where incremental progress is preferred over deadlock.
Political Optics: Modi Government Looks for Wins Before 2026
For Prime Minister Narendra Modi’s administration, clinching the UK trade deal could be a major diplomatic win before India heads into state elections in late 2025.
An India–UK FTA is expected to:
- Boost exports in textiles, pharma, and IT services.
- Provide UK firms with easier entry into India’s retail, banking, and energy sectors.
- Enhance strategic cooperation in defence manufacturing, AI, and renewables.
“This is no longer just a trade deal. It’s about building the corridor of the post-Brexit world,” a London-based trade expert noted.
Final Word: Towards a New Global Trade Blueprint
As the global trade architecture adjusts to Trump-era disruptions, post-Brexit realignments, and US–China decoupling, India is placing itself at the center of the next wave of investment partnerships and supply chain resilience deals.
The India–UK FTA, now in its decisive phase, is poised to be more than a bilateral pact — it could be a strategic statement of 21st-century economic cooperation.
