Britain Reignites Old Alliances Amid Simmering Trade War

During a recent press briefing, Indian Finance Minister Nirmala Sitharaman emphasized the mutual enthusiasm between India and the United Kingdom to finalize a free trade agreement swiftly. “There is a great sense of positivity and also eagerness and dedication to have this concluded sooner rather than later from both the sides,” she said.

However, Sitharaman also warned that India would not be pushed into rushing the deal, citing the uncertainties triggered by former U.S. President Donald Trump’s trade policies. Speaking at India’s High Commission a day earlier, she highlighted the need for due diligence despite progress being made.

The trade deal has taken on greater political significance amid global economic volatility. “The U.S. tariffs mean that striking a deal has gone up the scale in terms of political priorities,” said Shashi Tharoor, chair of the Indian parliament’s committee on external affairs, in an interview with POLITICO. He noted that countries are increasingly seeking safety nets in response to growing global trade uncertainties.

Yet, several contentious issues still stand in the way of an agreement. These include disagreements over professional visa mobility, the U.K.’s proposed carbon border tax on Indian steel and other emissions-heavy goods, and intellectual property regulations.

U.K. officials struck an optimistic tone, suggesting they were close to sealing the deal. One British government source told The Guardian that approximately 90 percent of the agreement had been finalized and claimed that mobility issues were largely resolved. However, a source familiar with the negotiations, speaking on condition of anonymity, contested that characterization, saying the situation is more nuanced.

Tharoor emphasized India’s desire for expanded visa quotas, especially for professionals in key sectors such as IT and healthcare. “But [U.K.] domestic political concerns about foreigners coming into the country would certainly be a stymying factor,” he said. “So if the U.K. can’t give in on those areas as much as India would like, then what else can the U.K. offer?”