India, Britain step up trade talks amid Trump tariff threats

India and the United Kingdom have set an ambitious goal of more than doubling their bilateral trade within the next ten years, Indian Trade Minister Piyush Goyal announced on Monday. The statement came as the two nations resumed trade negotiations, even as concerns loomed over potential tariff increases imposed by U.S. President Donald Trump.

Speaking at a joint press conference with Britain’s Business and Trade Secretary Jonathan Reynolds, Goyal emphasized that both countries were committed to accelerating discussions on a proposed trade agreement. The negotiations would cover a free trade pact and an investment treaty, which are expected to strengthen economic ties between the two nations.

However, when asked whether their discussions had been affected by Trump’s recent directives to increase tariffs and introduce countermeasures against perceived trade barriers to American products, the ministers chose not to provide a direct response.

A joint statement released by India and the UK indicated that the decision to resume trade talks stemmed from a meeting between their respective prime ministers on the sidelines of the G20 summit in November. That gathering took place just weeks before Trump was sworn in for his second term as U.S. president.

Goyal described the prospective trade deal as “path-breaking” and stated that it had the potential to increase merchandise trade between India and the UK by two to three times within the next decade. However, he did not specify an exact timeline for the completion of negotiations or the implementation of the agreement.

According to estimates from the British government, the total value of trade in goods and services between India and the UK reached approximately £41 billion ($52 billion) in the 12 months leading up to September 2024. The two nations, currently ranked as the world’s fifth- and sixth-largest economies, respectively, are looking to build upon this figure through expanded economic cooperation.

Trade discussions had previously been put on hold in March 2024 due to upcoming elections in both countries. Now, with new leadership in place, both sides appear eager to revive and finalize the long-awaited agreement.

India has made notable progress in trade diplomacy in recent years, having signed agreements with several key partners. In 2022, it reached trade deals with the United Arab Emirates and Australia, and in 2023, it signed an agreement with the European Free Trade Association (EFTA), which includes Switzerland, Norway, Iceland, and Liechtenstein.

Meanwhile, earlier this month, India made a significant tariff reduction on bourbon whisky, lowering the import duty from 150% to 100%. The decision came after Trump publicly criticized what he described as “unfair” tariffs imposed on American products in the Indian market.

As trade negotiations between India and the UK move forward, the potential impact of U.S. trade policies remains an important factor to watch. The evolving geopolitical landscape could influence the final terms of the agreement, as both nations seek to balance their economic relationships with multiple global partners.