India and UK to seal trade deal in ‘next few months’, minister says

India’s commerce minister has said New Delhi is on track to conclude a full trade agreement with the UK by October, adding negotiators had already finalised nearly half of what would be one of Britain’s most ambitious deals since Brexit.

Piyush Goyal told the Financial Times he expected the two countries would conclude the trade deal “within the next few months” and that 11 of the proposed pact’s 26 chapters were already “dusted and ready”.

Both Indian prime minister Narendra Modi and UK counterpart Boris Johnson have pushed trade diplomacy as part of their economic agendas. India is pursuing trade agreements with everyone from the EU to Canada after inking deals with the United Arab Emirates and Australia, while Downing Street sees an agreement with New Delhi as a centrepiece of its post-Brexit economic strategy.

The mooted deal is expected to improve market access for goods such as British whisky and Indian textiles. But it also touches on politically sensitive areas, including potentially opening up the UK to more students and skilled workers from India.

Johnson said on a visit to New Delhi in April that he hoped it would be concluded by the Hindu festival of Diwali at the end of October, a deadline Goyal endorsed.

“Whenever you have a free trade agreement, there is always a lot of give and take,” Goyal said, while declining to discuss the outstanding differences between the two sides. “The challenges are there. But there are no challenges that cannot be overcome.”

Goyal brushed aside criticism of New Delhi’s growing imports of Russian oil at a time when western countries are reducing their energy trade with Moscow because of its war on Ukraine. “We had an old relationship with Russia which continues as it did,” he said. “There’s no change in our position.”

Since the start of the Ukraine conflict, Russia has grown into one of oil import-dependent India’s largest suppliers as its refiners enjoy steep discounts on Urals crude. “Europe is using gas from Russia,” Goyal added. “Every country has to protect its national interests.” 

India’s growing importance as a consumer market, and as an Asian geopolitical counterweight to China, has muted criticism of the Modi government’s ties with Russia from the UK and others.

India’s economy is being buffeted by higher food and oil prices, with India this week reporting a record $26bn monthly trade deficit for June.

The country in May curtailed wheat exports over concerns about domestic food security after a severe heatwave damaged its crop, prompting alarm that it would further tighten already strained global supplies.

But Goyal defended the move, arguing that it had allowed the Indian government to continue providing grain to other governments that needed it the most, while limiting private speculation. “We want to make sure the truly deserving countries . . . get our wheat at affordable prices,” he said.

Goyal said he aimed to help India become a $30tn economy within 30 years, from about $3tn now.

“The world recognises there’s no other country in the world which offers a market like India, which offers 1bn people aspiring for a better quality of life,” Goyal said. “A market which will probably grow 10X in the next 30 years, as against the developed world which will probably be 2X or 3X 30 years from now.”