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Louise Thomas
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David Lammy is due to land in India this week after his cabinet colleague Jonathan Reynolds ordered officials in the Department for Business and Trade (DBT) to reopen trade talks.
The foreign secretary is due to meet his Indian counterpart Vikram Misri as Keir Starmer’s new government tries to complete the major trade deal which eluded the Tories.
But the resumption of relations with India after both countries had elections is also set to spark controversy after Narendra Modi embraced Russia’s Vladimir Putin at a summit earlier this month. The meeting in Moscow saw the Indian prime minister awarded Russia’s highest honour.
India had been seeking the release of its citizens who were in prison in Russia but the talks also concluded with the two sides setting out nine key areas for closer co-operation, including nuclear energy and medicine at a time when the international community is trying to heap pressure on Moscow over the war in Ukraine.
There will also be concerns among muslim groups concerned about the Hindu nationalism of Narendra Modi’s government. Sir Keir Starmer already has suffered some losses at the election from pro-Gaza independents over his stance in supporting Israel which has harmed Labour’s relations with muslim communities.
Forging closer ties with India is yet another break from the policies pursued by Jeremy Corbyn who was highly critical of the Modi government.
But despite these concerns, The Independent has learnt that new business and trade secretary Mr Reynolds has told officials to immediately review where the UK is with the key trade talks with the emerging economic superpower with a view to opening the talks with Modi’s government “ASAP”.
The India trade deal was a Brexit prize which the governments led by Boris Johnson, Liz Truss and Rishi Sunak all hankered after but failed to land with the now Tory leadership favourite Kemi Badenoch overseeing the last attempts.
Ms Truss came closest but the deal fell apart when her home secretary Suella Braverman refused to accept more visas for Indians.
Prior to that Mr Johnson’s attempts to rush through a deal by diwali also backfired. Under Rishi Sunak’s leadership his trade secretary Kemi Badenoch hoped to have it agreed by the nd of 2023 but progress was slow.
But with a message of “make Brexit work”, Mr Reynolds has “put new energy into the Department for Business and Trade with a dual track of fixing the harms of Brexit with an improved deal with the EU but also prioritising a trade deal with India.
Marco Forgione, the director of the Institute for Export and International Trade, which is a consultative body with the DBT, told The Independent that the plans fitted with Rachel Reeves “securonomics” approach and that “it is less about free trade agreements and more about trusted trade agreements”.
He said that such a deal would be worth billions alone to the British economy just on reducing tariffs on whisky, but Mr Forgione said the most important part about it is that a dea with India will boost and secure Britain’s import and export supply chains and end over reliance on China.
Mr Forgione said: “It’s clear that there’s a real focus and energy. And I think part of that is, you know, Rachel Reeves has established the sense of securonomics, which means making sure that we’ve got diverse, resilient supply chains, and joining Reynolds, I think, is pursuing that growth agenda and seeing trade, imports and exports as an essential plank of that.
“The point that we’ve been making is that the world of trade has changed and changed dramatically in the last couple of years, and we need to see a move from free trade agenda to a trusted trade agenda. That trusted partnership, those trusted relationships. So it had to be absolutely essential. And I think Jonathan Reynolds was showing that that’s the path that this government is going to be pursuing.”
Talks had been suspended because of the election in India and then quickly followed by the election in the UK.
But with Modi reelected he has said he wants to get a deal done within the first 100 days of his government.
Mr Lammy will travel to India on Wednesday where he will meet with his counterpart to discuss the UK-India tech security initiative – looking at information sharing, telecoms, AI and semiconductors which Mr Forgione said will need to be part of a trade deal.
