Richard Heald, chair of the UK India Business Council, expressed optimism about the FTA's potential to strengthen economic ties and signal a strategic partnership between the two nations.

These discussions come at a time of increasing global trade tensions and tariff threats from the US, prompting the UK to expedite negotiations with India.

Key sticking points in the negotiations include tariffs on motor vehicles and whiskey, the movement of skilled professionals, and concessions in the services sector.

India and the UK officially resumed trade negotiations on February 24, 2025, after a year-long pause, focusing on a free-trade agreement (FTA), a bilateral investment treaty (BIT), and a social-security pact.

The trade relationship is valued at £41 billion and is projected to potentially double or triple bilateral trade from the current $20 billion over the next decade.

Currently, tariffs on cars in India are set at 100%, while Scotch whisky and wines face tariffs of 150%, making these significant points of contention.

The UK seeks greater access to Indian markets, particularly in telecommunications and financial services, while India is advocating for a more open migration policy for its skilled workers.

The UK is advocating for lower import duties on key products such as Scotch whiskey, electric vehicles, and confectionery items, which could enhance trade flows.

The resumed discussions aim to build on previous progress and close gaps to finalize the trade deal swiftly, although no timeline has been provided for concluding the talks.

India's Commerce Minister Piyush Goyal defended the country's high tariffs, emphasizing their role in protecting against unfair trade practices, but acknowledged the potential for lowering tariffs with the UK.

India insists on a social-security agreement as a non-negotiable aspect of the talks, aiming to protect the contributions of skilled workers across borders.

The UK aims to boost economic growth by accessing India's rapidly growing economy, which is projected to become the world's third largest by 2028.