UK and India rush to secure trade deal after Trump tariffs

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Britain and India have held talks on closer financial co-operation as they rush to secure a trade deal, with officials in New Delhi saying US President Donald Trump’s trade war has put new impetus behind negotiations.

An Indian government official said on Wednesday that the trade discussions with the UK were going “very well” and that agreement on a trade accord could be reached in the coming months. 

There have been false dawns before on a bilateral trade agreement, notably when former UK Conservative prime minister Boris Johnson promised that it would be signed “by Diwali” in October 2022.

But Indian officials say pressure from the US has given fresh impetus to long-delayed trade talks with the UK and EU, with both New Delhi and Brussels saying they expect to conclude the latter agreement this year. 

India, which opened trade talks with Britain three years ago, was hit by a 26 per cent US tax on its goods in Trump’s global round of tariffs. Prime Minister Sir Keir Starmer has also called for faster trade talks after the US imposed a 10 per cent levy on British imports.

Negotiations have previously stumbled over issues including visas for Indians assigned by their companies to the UK and British social security payments for Indians who spent part of their careers working in the UK. 

Britain is hoping to gain better access to Indian markets for advanced manufacturing, clean energy, financial services and professional and business services.

UK chancellor Rachel Reeves met India’s finance minister Nirmala Sitharaman in London for a UK-India economic and financial dialogue on Wednesday and pledged to accelerate trade deals.

“Our relationship with India is long-standing and broad and I’m delighted with the progress made throughout this dialogue to develop it further,” she said.

The two sides touted a number of deals to illustrate deepening trade ties. Paytm, an Indian digital payment app, set out plans to invest in the UK, while Coventry University announced it had been granted a licence to open a campus in Gujarat.

Earlier Reeves promised leading City of London executives that she would seek better trade deals across the world, including with India, the EU, the Gulf states, South Korea and Switzerland.

Reeves told figures including Charlie Nunn of Lloyds Banking Group, Dan Olley of Hargreaves Lansdown, Andrea Rossi of M&G and António Simões of L&G that Britain could offer foreign investors “resilience” in a turbulent world.

One person who attended the meeting said: “There was a general sense of calm, while exercising prudence and a need to monitor developments closely.”

The person added that there was a general sense that there had not yet been a “significant reaction” from customers to the market turmoil unleashed by Trump’s tariffs but an acceptance that volatility would affect all economies.