India, UK FTA Negotiations: Key Updates

Posted by Written by Melissa Cyrill Reading Time: 12 minutes

Digital trade and investor protection key issues for March round of talks

Nikkei Asia are reporting that 13 out of 26 policy areas have been closed, covering topics from goods and services to investments and IPR. Both sides have variously mentioned that the talks have enjoyed “good, positive” momentum. Now, British stakeholders are hoping that regulatory barriers are cleared to facilitate trade through digital services and digitally enabled services. However, a data bill is currently with India’s parliament and could impact the FTA negotiations. A recent UK-Japan free trade deal addressed data localization, customs duties on digital transmissions, and recognition of digital signatures. A deal with India could reference that template.

Other sticky issues include investor protections for British businesses, who seek early arbitration in case of disputes rather than get stuck in Indian courts. Further, UK demands for duty concessions on Scotch whisky and automobiles are still hitting a wall with India. Meanwhile, the corporate sector will be looking for progress on visa and mobility issues.

Foreign lawyers and international law firms can now practice in India

Among key issues for UK negotiators was getting India to approve legal practice for foreign lawyers and international firms in its jurisdiction. After several rounds of discussions, the Bar Council of India (BCI) announced the “BCI Rules for Registration and Regulation of Foreign Lawyers and Foreign Law Firms in India, 2022” on March 10.

Foreign lawyers and law firms can now practice foreign law, engage in international arbitration matters, and advise on international legal issues in non-litigious matters in India on the principle of reciprocity. Further, they can practice transactional and corporate work, such as joint ventures, mergers and acquisitions, intellectual property matters, and drafting contracts, among other related matters. However, they will not be allowed to appear before any courts, tribunals, or other statutory or regulatory authorities in India. If found guilty of misconduct, their registration in India will be cancelled.

It should be noted that the UK has claimed to have authorized Indian lawyers and law firms to establish offices in England and Wales, allowing them to practice Indian law, international law, and provide legal advice under English law. The Bar Council of India has stated that it will verify these claims and reciprocate accordingly.

Round 8 of FTA talks scheduled for March

Negotiations continue on a “forward-facing trade deal with India”, with the eighth round of India-UK FTA discussions set to take place in New Delhi [on hybrid mode] from March 20-24.

Trade ministers of both countries recently met on December 13, 2022, and January 27, 2023, to take stock of progress. India and the UK recorded trade “worth £34 billion to year end September 2022”.

Discussions have closed on 13 chapters of the trade agreement. There are 26 chapters in the proposed FTA deal, which include goods, services, investments, and intellectual property rights.

Top British fashion and beauty brands embark on first-of-it’s-kind trade mission to India

The UK Department for International Trade notified on February 27 that top UK brands will join India’s Fashion Forum 2023, the country’s largest fashion retail intelligence event. The British delegation will seek to tap into India’s rising demand for high-class beauty and fashion products.

British brands participating in the sales mission include cosmetics retailer Lush, luxury knitwear brand John Smedley, and fashion brands like Wormser, Organic Apoteke, Lilly and Sid, Legology, Benny Hancock, VENIA Cosmetic Ltd, Jennifer Young Ltd, and ByErim Ltd.

The trade mission, the first of its kind, is organized by the Department for Business and Trade to facilitate British brands in showcasing their expertise in luxury, heritage, and innovation to potential buyers and distributers.

India accounts for 1.7 percent of total UK exports and India was the 12th largest export market for the UK in the four quarters to the end of Q3 2022.

The UK Business and Trade Secretary Kemi Badenoch also expressed optimism about business and export trade prospects with India, saying: “India’s growing economy and middle class represent an enormous opportunity for enterprising UK companies looking for new markets.”

India is poised to become the third largest economy in the world by 2050, with a projected middle class cohort of 250 million consumers. According to luxury lifestyle magazine Robb Report India, in 2021, the Indian luxury goods market was valued at over US$5 billion, and expected to grow by another 10 percent over the next five years.

Seventh round of talks completed

The seventh round of India-UK FTA discussions took place in London from February 6-10. The Indian High Commission organized an investor showcase to highlight opportunities for UK businesses in India’s infrastructure and green mobility, among other sectors.

Technical discussions were held across 11 policy areas over 43 separate sessions.

UK wants a trade deal with India this year, but setting no clean deadlines

Speaking to The Times, UK Secretary of State for International Trade Kemi Badenoch discussed possible concessions on matters like business mobility but firmly rejected an FTA modelled on the country’s post-Brexit agreement with Australia.

The UK allows under-35s from Australia to live and work in the country – but is not interested in negotiating that kind of free movement with India. Badenoch made it a point to say, “We left the EU (European Union) because we didn’t believe in free movement, we didn’t think it was working.” She also said, “…what people from the UK want to do when they travel to Australia is probably slightly different from what they do when they travel to India, and vice versa as well.”

In January, India and the UK agreed to a reciprocal UK-India Young Professionals Scheme, which would annually offer visas to 3,000 graduates in the 18 to 30-year-old cohort to live and work in either country for up to two years. It would appear the British government does not intend to facilitate more.

Further, Badenoch is opposed to a deadline-bound negotiation process – favored by the previous Boris Johnson government – as either party could hold talks hostage by running down the clock. A deal this year would be good, but if things are not working out for either party, Sunak’s government could stand aside. Badenoch elaborated: “I do think a deal this year. I don’t know when. But after a while if things don’t conclude then people just move on, on both sides. I’m very keen to sign a deal this year.”

As per official UK government data, India-UK bilateral trade stood at around GBP 29.6 billion a year.

Sixth round of talks conclude

The sixth round of negotiations for the India-UK FTA concluded in December with detailed draft treaty discussions across 11 policy areas over 28 separate sessions.

Meanwhile, the India (Trade and Investment) All Party Parliamentary Group (APPG), backed by British Indian think tank 1928 Institute as its secretariat, will take its first delegation to India in April.

The seventh round of official-level negotiations is due to take place in early 2023.

Sixth round of FTA talks begin

UK Secretary of State for International Trade Kemi Badenoch is in New Delhi for the sixth round of India-UK Free Trade Agreement (FTA) talks with her Indian counterpart Piyush Goyal, starting Monday, December 12.

Trade in goods, including passenger vehicles, are among areas under discussion, which began January 13, 2022.

India received FDI worth US$1.64 billion in 2021-22. Between April 2000 and March 2022, India attracted US$32 billion in FDI.

Under PM Sunak, FTA talks to prioritize business interests

Unlike previously, the India-UK FTA negotiations under Sunak’s government will not be chasing a deadline.

As per Indian government officials speaking to the media, three-four chapters are currently being discussed for final completion. Chapters yet to be concluded involve intellectual property and goods.

Trade negotiators will begin their next round of talks in the coming months. Topics on the agenda include patent regime for pharmaceutical companies, work visas, and access to Indian movies. The UK wants reduction in the import duty on automobiles and scotch besides a separate chapter on financial services. UK negotiators are also keen to bring labor into the FTA’s ambit.

The UK does not seek a quick deal as they want to secure quality of provisions. Meanwhile, the Indian side is also being cautious given the inclusion of several non-trade related subjects in the FTA.

While India seeks a March 2023 conclusion to the deal, discussions on sticky issues in the next round of talks will determine whether this is possible.

Political situation in UK slows down momentum of FTA talks with India

India and the UK passed their Diwali deadline (October 24) for an FTA – as was set by PM Boris Johnson. While the trade deal has political backing on all sides, last mile negotiations have been stuck on issues linked to immigration, automobiles, intellectual property (IP), and the alcohol industry.

Moreover Johnson who had been plagued with political scandals had his term cut short and was followed by Liz Truss after she won a Conservative Party leadership contest that enabled her to fill the prime ministerial role. Truss had defeated Rishi Sunak, Chancellor in PM Johnson’s cabinet. PM Truss herself resigned on October 20, having lasted barely 44 days in office. Rishi Sunak subsequently became prime minister on October 25 as his bid for Conservative Party leadership went uncontested.

When Truss was in power, PM Narendra Modi’s government had reportedly sought an official visit to the UK in October. It is now more likely that FTA talks and official meetings will only pick up in 2023. Given the changed state of affairs, the Indian side is on ‘wait and watch‘ mode.

Sunak has mentioned in the past that an India-UK FTA would boost the financial services sector (prospects for fintech and insurance, for example) – something the city of London is entirely keen upon. However, the recent months has brought unprecedented economic pain to the UK with rising living costs and high energy bills.

The incoming PM Sunak will be looking at the trade treaty prospects much differently – and his cabinet will also add pressure. Suella Braverman has been appointed Home Secretary – she had resigned from PM Truss’s cabinet over the latter’s stance on immigration. Market access for professional services feature prominently on India’s expectations from an FTA with the UK. 

Speaking to parliament about the status of the trade deal on October 26, Greg Hands, the UK trade department minister said: “We have already closed the majority of chapters and look forward to the next round of talks shortly.” The UK will only agree to a trade deal that is “fair and reciprocal”.

Key issues for India-UK FTA negotiators include liquor, automobiles, intellectual property, and mobility of students and professionals.

Fifth round of India-UK free trade negotiations

India and the UK concluded the fifth round of negotiations towards their free trade agreement (FTA), on July 29. Spread over two weeks, both sides maintain confidence in the status of their technical talks. As of September 5, India and UK trade negotiators reportedly completed discussions on 19 of the 26 chapters under the proposed FTA. As per officials speaking to the media, two chapters out of the remaining seven are expected to take longer to close discussions on – as they contain items of particular interest to either side. The sticky topics include liquor, automobiles, and intellectual property rights.

Both India and the UK are seriously working towards reaching a conclusion by the much talked Diwali deadline, as the new Prime Minister Liz Truss looks set to prioritize relations with India as part of her government’s foreign policy.

On a four-day official visit to India in September, Vincent Keaveny, the 693rd Lord Mayor representing the City of London, held meetings with leading Indian businesses, investors, and finance chiefs at the banking regulator Reserve Bank of India (RBI) and the Securities Exchange Board of India (SEBI). Keaveny is London’s ambassador for financial and professional services. Speaking to the media, Keaveny maintained careful optimism about the FTA’s tight deadline, saying: “Prime Minister Modi has made it clear that he wants to sign the FTA by Diwali. There are some outstanding issues to be resolved but I think there’s a lot of optimism on both sides that we will get that done. Whatever the content of the agreement, it will be a real positive for the relationship between India and the UK across the board in the coming years.”

The India-UK trade talks have been conducted in a hybrid manner – some teams met in New Delhi while a majority joined for virtual official talks. In addition, technical experts from both sides came together for detailed draft treaty text discussions in 85 separate sessions covering 15 policy areas.

Further, the UK parliament has set up the cross-party panel – ‘India (Trade and Investment) All Party Parliamentary Group (APPG)’ – to promote trade and investment between India and the UK. APPG will support the ongoing FTA negotiations and its goals once the trade treaty is signed.

What are the next steps?

India’s trade negotiators are expected to visit London sometime at the end of September or early October, with anticipated delays as the new British government settles in. Both countries hope to sign a comprehensive and balanced FTA by the end of October.

Unlike traditional FTAs, the final India-UK trade deal will cover a wider range of areas, including gender, labor, trade and development, corruption, and MSMEs. 

The two countries have also set up committees to discuss a totalization agreement sought by New Delhi, which will ease the social security compliance burden on Indian IT companies and remove dual social security taxation. India also wants market access to the UK legal services sector. It bears knowing that services trade accounts for 60 percent of overall annual commerce between India and the UK.

While there has been some instability in UK politics and government, with Prime Minister Boris Johnson stepping down in July, followed by a party leadership contest to replace him, the India-UK trade talks continued undeterred, also confirmed by Indian commerce secretary B.V.R.Subrahmanyam. Intensive FTA discussions were scheduled throughout the summer. 

In India, export representative and industry stakeholders have been organizing discussions to provide actionable inputs to the government so that the FTA is mutually beneficial to both countries.

What’s at stake

The UK is keen to gain India market access for transport equipment, electrical equipment, medical devices, chemicals, motor vehicles and parts, wines, Scotch, and spirits, some fruits and vegetables – which could impact local industry players and/or boost the manufacturing ecosystem. On its part, India wants to increase exports of textiles, food and beverages, pharmaceuticals, tobacco, leather and footwear, and agricultural items like rice – to the UK. Digital services and ICT sectors will also benefit and drive the expansion of bilateral trade under the FTA. 

The Russian invasion of Ukraine has delivered many curveballs, and major economies in the Western sphere have been particularly hit due to their position on Moscow’s activities and imposition of sanctions. In Q1, as per data from the UK Office of National Statistics, petroleum products dominated Indian exports to the UK with shipments worth £888 million. The upcoming FTA could unlock further expansion of Indian exports of refined petroleum products.

What were the technical areas covered in Round 5 talks?

As part of their latest round of talks, India and the UK signed agreements in the fields of education and nursing on July 21, 2022. These will ease short-term mobility for professionals and create employment opportunities. 

India is the 10th largest service trade partner to the UK.

Recognition of academic qualifications

Mutual recognition of academic qualifications and duration of study in recognized and approved higher educational institutions in both countries will ease movement of professionals across the two markets (see UK government document here).

For example, Indian senior secondary school and pre-university certificates will be recognized for entry into the UK’s higher educational institutions. However, the MoU on education does not cover professional degrees, such as engineering and medicine.

MoU on maritime education

The memorandum of understanding (MoU) in maritime education will ensure mutual recognition of certificates of “maritime education and training, competency and endorsements of seafarers issued by each side”. India is among the top suppliers of seafarers in the world, and this India-UK MoU opens job prospects in the British shipping sector (see UK government documents here).

Recruitment for British healthcare sector

Recruitment of Indian nursing and allied health professionals for the UK healthcare sector will benefit from the Framework Agreement on Healthcare Workforce (see UK government documents here).

India-UK trade and investment profile

As per UK government data, released August 19 – the total trade in goods and services between the UK and India increased by 35.2 percent at the end of Q1 2022 compared to the end of Q1 2021 (an increase of £6.7 billion). Trade between China and the UK during the same period also grew, but only saw an increase of 5.5 percent or £4.9 billion.

However, total trade (export plus import) between UK and India was £25.7 billion and between UK and China was £93.4 billion in the four quarters to the end of Q1 2022. It is hoped that following their FTA, India and the UK can broaden the scope of bilateral trade. The goal is to double bilateral trade in goods and services to US$100 billion by 2030.

About 70 percent of India-UK trade is dominated by the services sector, as per reporting by the Financial Express. The proposed India-UK FTA would ultimately cover 90 percent of tariff lines.

UK-India trade factsheet: Q2 2021 to Q1 2022

The UK Department for International Trade iterated the below data in September:

  • At the end of Q1 2022, total UK exports to India reached £8.8 billion over the previous four quarters showing an increase of 21.3 percent or £1.5 billion when compared to the four quarters to the end of Q1 2021.
  • At the end of Q1 2022, total UK imports from India grew to £16.9 billion in the four quarters to the end of Q1 2022, which was an increase of 43.9 percent or £5.2 billion when compared to the four quarters to the end of Q1 2021.
  • India accounted for 1.9 percent of total UK trade between Q2 2021 and Q1 2022 and was the UK’s 12th largest trade partner.
  • In 2020, UK foreign direct investment (FDI) in India amounted to £14.9 billion, accounting for less than one percent – 0.9 percent – of the total UK outward FDI stock.
  • In 2020, Indian FDI in the UK was £10.6 billion, accounting for 0.6 percent of the total UK inward FDI stock.
  • Goods trade:
    a) The top five goods exported from the UK to India in the four quarters to the end of Q1 2022 were: non-ferrous metals (£1.2 billion or 22.0% of all UK goods exported to India), metal ores and scrap (£598.1 million or 11.3%), mechanical power generators (intermediate) (£496.4 million or 9.3%), crude oil (£239.9 million or 4.5%), general industrial machinery (capital) (£223.8 million or 4.2%).
    b) The top five goods imported to the UK from India in the four quarters to the end of Q1 2022 were: refined oil (£887.8 million or 9.7% of all UK goods imported from India), clothing (£874.7 million or 9.6%), medicinal and pharmaceutical products (£508.6 million or 5.6%), miscellaneous metal manufactures (£466.7 million or 5.1%), and textile fabrics (£455.7 million or 5.0%).
  • Services trade:
    a) The top five service types exported from the UK to India in the four quarters to the end of Q1 2022 were: other business services (£1.4 billion or 39.5% of all UK services exported to India), travel (£813 million or 23.3%), transportation (£453 million or 13.0%), telecommunications, computer, and information services (£207 million or 5.9%), and intellectual property (£168 million or 4.8%).
    b) The top 5 service types imported to the UK from India in the four quarters to the end of Q1 2022 were: other business services (£5.8 billion or 74.7%), telecommunications, computer, and information services (£913 million or 11.7%), transportation (£351 million or 4.5%), travel (£323 million or 4.2%), and financial (£111 million or 1.4%).

India-UK FTA negotiations began formally in January 2022. For a brief round-up of trade talks so far, see our article on India’s FTAs being negotiated in 2022: Updates on India’s FTAs in 2022

If you have any questions about doing business in India or the UK, you can reach us by emailing at:

This article was originally published August 22, 2022. It was last updated March 2023.

Also Read:

About Us

India Briefing is produced by Dezan Shira & Associates. The firm assists foreign investors throughout Asia from offices across the world, including in Delhi and Mumbai. Readers may write to for more support on doing business in in India.

We also maintain offices or have alliance partners assisting foreign investors in Indonesia, Singapore, Vietnam, Philippines, Malaysia, Thailand, Italy, Germany, and the United States, in addition to practices in Bangladesh and Russia.