Indian government in talks for trade deals with the UK and Qatar

UK government ministers travelled to India at the end of February to re-start negotiations on securing a trade deal between the two nations.

India is forecast to have the highest growth rate in the G20 for the next five years and set to become the world’s third biggest economy by 2028.

“Securing a trade deal with what is soon-to-be the third biggest economy in the world is a no-brainer, and a top priority for me and this Government,” said UK Business and Trade Secretary Jonathan Reynolds. He added that taking a negotiating team to New Delhi “showed our commitment to getting these talks back on track”.

He said: “Growth will be the guiding principle in our trade negotiations with India and I’m excited about the opportunities on offer in this vibrant market.”

The talks are the first time both negotiating teams have formally got around the table under the Labour government that was elected in July 2024.

Since 2022, the UK has been through more than a dozen rounds of talks over a potential agreement with India.

Key sticking points were said to include visa rules for Indian students and professionals, as well as access for British service firms to India’s markets, according to media reports.

Chair of UK India Business Council Richard Heald said: “The UK government’s visit reaffirms its commitment for a new ambitious and future-focused trade and investment relationship with India.

“We are delighted to note the progress on the UK-India Free Trade Agreement negotiations. Success in the FTA will support further economic growth for the world’s fifth and sixth largest economies. It will catalyse collaboration beyond into other areas, too. Importantly, it will signal the UK and India are strategic partners. This is truly an exciting chapter of the UK-India partnership.”

As part of the visit, UK Investment Minister Poppy Gustafsson addressed investors in two of the country’s foremost business centres, Mumbai and Bengaluru, selling the UK as the best and most connected place for Indian businesses to invest.

India has been the second biggest source of foreign direct investment (FDI) into the UK for five consecutive years in terms of number of projects. In terms of value, the most recent figures show a 28% year-on-year increase in investment at the end of 2023.

Gustafsson said the UK offer for Indian investors “has never been stronger… thanks to the government’s drive to restore economic stability and boost investor confidence as part of the Plan for Change.

The UK and India’s current trade relationship is worth £41 billion and investment, supporting over 600,000 jobs across both countries.

A trade deal could unlock new opportunities for businesses and consumers in all regions and nations of the UK, support jobs, boost wages, and back the high-growth sectors identified in the government’s upcoming Industrial Strategy. These include sectors including advanced manufacturing, clean energy, financial services and professional and business services, the UK government said.

India negotiates stronger ties with Qatar

Earlier in February, India’s Prime Minister Narendra Modi met with Qatar leader Amir Sheikh Tamim bin Hamad Al Thani for talks on increasing trade between the two parties.

During the talks, India and Qatar agreed to double the target of bilateral trade to $28 billion in the next five years, and bring Qatari investment of $10 billion to India.

The two leaders also discussed exploring a Free Trade Agreement between India and Qatar, elevating ties while focusing on trade, investment and energy. Trade between the two countries is currently worth $14 billion annually, and the two parties set a target to double it to $28 billion by 2030.

Qatar’s sovereign wealth fund has $1.5 billion FDI in India, and in the joint statement following the meeting Qatar announced a commitment to invest $10 billion in India.

During Sheikh Al Thani’s visit to India, both countries signed two agreements and five Memorandums of Understanding (MoUs), covering areas including economic co-operation, youth affairs and a double taxation avoidance agreement.

Within the Gulf Cooperation Council (GCC), India has signed strategic partnerships with the UAE, Saudi Arabia, Oman, Kuwait and now Qatar.