Senior Downing Street officials have flown to Delhi to kickstart talks over a multibillion pound free trade agreement, with the government of Narendra Modi having indicated it is keen to finalise a deal in the next three months.
UK trade negotiators are in the Indian capital talking to their Indian counterparts as they look to revive a deal that looked a distant prospect just a few months ago.
Sources say the Modi government is keen to complete an agreement by the end of February, when the Indian prime minister will begin touring the country on the general election campaign trail.
A pre-election trade deal would provide a major boost to both Modi and the British prime minister, Rishi Sunak, who is keen to show the potential benefits of Brexit before he also goes to the polls at some point in the next year.
One official close to the talks said: “The deal is still very much on and we think it is possible before both countries have their elections. Both sides are keen to get this done.”
A spokesperson for the UK Department of Business and Trade said: “The UK and India continue to work towards an ambitious trade deal that works for both countries. We have always been clear we will only sign a deal that is fair, balanced and ultimately in the best interests of the British people and the economy.”
The Indian government declined to comment.
A free-trade agreement between India and the UK has been on the cards since Britain left the EU, freeing it up to negotiate its own trading arrangements. Talks between India and the EU have been going on for years, with little sign of progress.
Boris Johnson originally promised to sign a deal by last Diwali, but missed the deadline after finding it difficult to reach agreement on central parts of a deal such as visa arrangements and access for British services companies to the Indian market.
Sunak put the negotiations on the backburner after entering Downing Street last year as he focused instead on renegotiating Britain’s relationship with the EU. The UK prime minister also insisted the deal should include access for UK services companies as well as lower tariffs on goods, something that has been harder to negotiate.
The deal once again became a priority for both countries this summer, helped by the meeting between the two prime ministers at the G20 in Delhi in September.
The British prime minister had hoped the deal might be ready to complete by the end of October in order for him to travel to Delhi to sign it and watch the England-India Cricket World Cup match at the same time.
However, sources say negotiations slowed over the autumn, only to have picked up again in recent weeks.
Officials say the deal on the table during these 13th round of talks includes lower tariffs for British goods in India such as cars and whisky, as well as increased access for British lawyers and financial services companies. In return, the Indians will get faster and easier processing arrangements for their companies to send workers to the UK.
The two sides are discussing how long workers coming on intracompany transfers can stay and whether they will be allowed to bring their dependants.
The UK recently changed its rules on skilled workers to ban care workers from bringing their dependants in an attempt to cut numbers. Some experts thought Delhi would be angered by that given how many Indians migrate to the UK to work in social care.
However, sources say they are more interested in improving the conditions for those being transferred within their companies. British officials are willing to negotiate on this point not least because intracompany transfers do not show up in the migration statistics.
