The UK and European Union (EU) are both racing to complete trade deals with New Delhi. This clear urgency to complete pending Free Trade Agreements (FTAs) with the world’s fastest growing large economy comes against a backdrop of growing economic and geopolitical challenges, including US President Donald Trump’s tariff threat approach to negotiations and the raging Russia-Ukraine conflict.
A busy diplomatic season
Last month, UK Secretary for Business and Trade Jonathon Reynolds visited India. A bilateral meeting with Indian Minister for Commerce and Industry Piyush Goyal was a highlight of his visit, where the resumption of FTA negotiations was formally announced. An FTA with India would eliminate many tariff and non-tariff barriers to free movement on both sides, boosting bilateral trade.
The search for a trade deal with India has stretched on since 2016. Much water has flowed under the proverbial bridge since then, with a record-breaking five British prime ministers coming and going in the six years after. Nonetheless, almost nothing had been able to impel FTA negotiations to a satisfactory conclusion.
Now, a new Labour government has taken charge of the baton of trade talks. The sticking points in the negotiations have nonetheless also remained constant. Britain has long insisted on the removal of Indian tariffs on British goods such as whiskey, while India continues to push a reluctant Britain for greater ease of immigration for Indian professionals and students.
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Countering extremism
Following on from this, Indian External Affairs Minister S. Jaishankar’s visit to the UK and Ireland between proved fruitful, demonstrating the renewed vigour in the £41bn UK-India bilateral trading relationship.
India opened two new consulates – in Belfast and in Manchester. This further expanded India’s diplomatic footprint in Britain, while also committing to £100 million in investments in the UK. Dr Jaishankar called it a “sign of bigger things to come” in UK-India relations.
While in the UK, he also met with UK Home Secretary Yvette Cooper during which joint efforts to tackle extremism was among the items on the agenda.
Soon after, this was brought into stark focus as protesting pro-Khalistan extremists attempted to disrupt the visit. India has demanded robust action against such extremist actions in the UK and despite condemnation of the incident by the Foreign Commonwealth and Development Office (FCDO), the Indian Ministry of External Affairs (MEA) said that continued incidents such as this one “brings out the licence accorded to such forces as well as their intimidation”.
India is understandably furious over the repeated breaches of security by extremists and is right to demand stringent action against those misusing the democratic right of peaceful demonstrations.
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India and Europe closer together
Meanwhile, in the US, President Donald Trump’s “America First” policy entails peace negotiations with Russia – not essentially matching up to the expectations of his British and EU allies. This is making both Brussels and London quite nervous, given that Russian troops still occupy some 20 per cent of Ukrainian land and the war rages on.
Tense ties with America may have well be at the back of the mind of Ursula von der Leyen, the President of the European Commission, as she made her own visit to India recently. During the visit, von der Leyen called a close alliance with India the ‘cornerstone of Europe’s policy in the years and decades to come,’ committing the EU to completing free trade negotiations with India by the end of this year – an ambitious target.
India and the EU also launched the second meeting of their bilateral Trade and Technology Council, where they discussed critical technology sectors such as artificial intelligence and semiconductors. This underscores the criticality of India to the burgeoning European high technology sector. A Europe that was traditionally reluctant to share sensitive technology with India has become more open about tech cooperation, amidst growing tensions with Russia, China, and Trump’s America.
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An uncertain world
A flurry of diplomatic engagements between India and its partners in the UK and EU demonstrates the renewed urgency for countries to cooperate with each other in the face of the economic challenges posed by Trump’s love of tariffs.
He also may be reluctant to part with technology, in a way that Britain and the EU may no longer be, as the joint statements for all three diplomatic visits emphasise technology cooperation. Getting economic growth going again in a sustainable and inclusive way is critical for governments that dislike Trump’s protectionist and unilaterally focused foreign policy instincts to stem the tide of rising populism.
The UK has seen immigration-sceptic party Reform surge, while Germany is experiencing the same with the Alternative für Deutschland (AfD), with these parties often being pro-Trump. While India’s centrality to US plans to balance China means Trump cannot afford to be dismissive of it, the importance of back-up trade and security relationships should the Trump administration ever sour on India cannot be dismissed.
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The world has entered a new era, where tariffs form a tool of statecraft and older Western alliances are fraying. Robust partnerships with a large and rapidly growing economy like India are foundational for both Britain and the EU going forward as a result. If promising commitments yield substantial FTAs, leaders in Delhi, London and Brussels can all breathe a collective sigh of relief.
Jeevan Vipinachandran is a UK-based writer and political analyst specialising in political conflict and counter-terrorism. With a Masters in Comparative Politics: Conflict Studies from the London School of Economics (LSE), his core interest is in international relations with a special focus on the rise of India and its impact on the world stage.