Keir Starmer and Narendra Modi are set to sign a £4.8bn trade deal on Thursday, concluding three and a half years of negotiations. The agreement will open up trade between the UK and India for cars, whisky, clothing, and food products.
For the UK, the deal provides a much-needed economic boost post-Brexit and demonstrates its ability to act nimbly on the international stage. For India, it signals that its £3tn economy is opening up after decades of protectionism. India’s average tariff rate is 13%, compared with the UK’s 1.5%.
Labour ministers secured the deal within 10 months of entering government, defying expectations. The negotiations were led by Trade Secretary Jonathan Reynolds and his Indian counterpart, Piyush Goyal. Officials highlighted the strong rapport between the pair and a focus on building trust as critical to success.
Creative gestures helped build relationships. After Goyal revealed he was a fan of the TV show Yes Minister, British negotiators brought him a handwritten note from co-creator Jonathan Lynn. At one point, after difficult talks, UK and Indian officials did yoga together in a corridor to relieve tension.
Political signalling was key. Labour had mended relations with India after a low point in 2019, and during the election campaign, Labour promised to prioritise a trade deal. In November, Starmer and Modi met to finalise the agreement.
