Boris Johnson has confirmed the UK plans to sign a post-Brexit free trade deal with India by October as negotiators prepare for a fresh round of talks this month.
The Prime Minister told MPs today that he was aiming to have the deal completed by the Indian holiday of Diwali as he doubled down on a promise made during his trip to New Delhi in April.
The UK government’s negotiators will travel to New Delhi this month to restart official talks and discuss issues such as India’s large barriers to City of London financial services firms.
The UK is also trying to get India to drop its 150 per cent tariffs on Scotch whisky and other trade barriers on goods like British-made machinery.
A senior source at the Department for International Trade (DIT) said it was “a good sign” India’s government last year softened trade barriers to overseas insurance firms, which has allowed them to increase how much they can invest in the country.
“India has traditionally had a protectionist economy when it comes to services – this is not news,” they said.
“But the fact they’re already moving in the right direction on things like the insurance industry shows there is real momentum when it comes to services and that a deal can be struck.”
Closing a deal with India, the world’s sixth largest economy, is seen as a major prize for the UK post-Brexit, however Prime Minister Narendra Modi has not made trade agreements a priority during his eight-year reign.
However, India’s recently signed economic and trade agreement with Australia has raised hopes in London that Modi is now looking to tear down international trade barriers.
It has been suggested that India’s recent slowdown in economic growth may have changed attitudes within the government about the need to embrace more international trade.