India’s finance minister, Nirmala Sitharaman, has said that the current wave of global economic uncertainty including the impact of new US tariffs is pushing nations to strike trade agreements beyond old political alliances. Her comments came ahead of a key meeting with UK Chancellor Rachel Reeves in London on Wednesday.
Speaking from the Indian High Commission, Sitharaman expressed optimism about finalising a free trade agreement (FTA) with the UK “sooner rather than later,” and noted that India has already struck bilateral deals with Australia, the UAE, and Oman. The country is also negotiating with the EU.
“Global uncertainties are multiplying by the day,” she said, “which is driving many countries to clearly be active on [seeking] bilateral arrangements.”
While she downplayed the notion that Donald Trump’s aggressive new tariffs had directly accelerated UK-India trade talks, Sitharaman acknowledged that the shifting international landscape had prompted a faster pace in deal-making. “We’re not rushing into this because of the US,” she said, “but we do hope that the enthusiasm of the UK’s new government will help us conclude this deal soon.”
The UK and India have been in negotiations since January 2022, and are now pursuing both an FTA and a bilateral investment treaty. Reeves, who has recently been engaged in efforts to calm markets following Trump’s tariff shock, said her government is “accelerating trade deals with the rest of the world to back British business and provide the security working people deserve.”
The Reeves Sitharaman meeting on Wednesday will be followed by a working dinner, potentially also attended by Prime Minister Keir Starmer. Talks will cover a wide range of topics including mutual recognition of professional qualifications, higher education cooperation, and collaboration in science and tech.
Sitharaman acknowledged a drop in the number of Indian students choosing UK universities in recent years, as the US has become a more attractive destination. She said the UK must work to regain that momentum.
However, domestic UK policy may complicate that effort. Reports suggest tensions between the Home Office and Department for Education over graduate visas which allow international students to stay in the UK for two years post-study could affect negotiations. The government is said to be reviewing these visas as part of its plan to reduce legal migration.
Trade Secretary Jonathan Reynolds, who recently visited India to reboot talks, will also participate in Wednesday’s discussions. The UK is seeking lower Indian tariffs on products like cars and whisky, and broader access for British legal and financial services. India, meanwhile, wants easier visa arrangements for its business professionals and fewer barriers for companies sending workers to the UK.
A key point of contention remains the UK’s requirement that Indian workers on temporary business visas pay national insurance, even though they are not eligible for UK social benefits an issue Delhi wants resolved.
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