Speaking to CNBC-TV18 during his visit to India, Reynolds emphasised that while timelines are often discussed, the agreement should focus on quality rather than speed.
“It is always about the quality rather than the speed,” said Reynolds. “We are talking about something which could be a beneficial improvement in trading terms, and it’s for decades, it’s for a long period of time. So, let’s get it right.”
While trade negotiations often centre on tariff reductions, Reynolds stressed that the India-UK FTA is much broader in scope. “There is a lot in this negotiation,” he said. “It covers goods, services, the investment relationship, the flow of people between countries—mobility, not immigration—but business mobility, which is really important to a successful trading relationship.”
He further emphasised that India and the UK have complementary economies, creating a natural fit for a strong trade deal. “We have lots of things for which there is demand in each country, but they’re not the same things,” he noted. “That gives us the chance to get this right and increases consumer choice while lowering prices for everyone.”
Richard Heald, Chair of the UK India Business Council, echoed Reynolds’ optimism, citing strong momentum behind the negotiations. “The new government started off with the technology security initiative in July. They followed it up with a series of bilateral meetings, and now we have Reynolds flying in and engaging directly. The music is pretty good,” Heald remarked.
Heald outlined the UK industry’s focus on gaining greater market access in India through tariff reductions, ease of doing business, and investor protection mechanisms. However, he emphasised that the UK is not making demands but seeking increased collaboration in future-focused industries such as artificial intelligence, aerospace, and quantum technology.
Edited Excerpt:
Q: Give me a sense of how your visit has been and what kind of progress you have made.
Reynolds: It is always a real privilege to be in India because for a trade minister like myself, the dynamism, the excitement that you feel in India — I know people here are very proud of that, and they are right to be proud because this always feels like a place of significance, where really exciting things are happening. So, it is nice to be here and to resume talks on the UK-India FTA and bilateral investment treaty with Minister Piyush Goyal, who is a superb host.
The visit has exceeded expectations on both sides. These are big agreements. — there is a lot to be gained when you get them right. So, you have to get them right. There are always questions about timescale, but what we have been able to do today and what the change of government has meant in the UK for the platform we can offer you makes this such an exciting negotiation.
So, this is a substantial agreement if we get it right. So, it is a chance I think for a whole new phase of UK-India relationships, a new partnership for the future, and so I am personally very excited about that.
Q: Give us a sense of how the Starmer government’s approach to this trade deal differs from Rishi Sunak’s government. A lot of work had already happened. They had concluded negotiations in about 14 out of 26 chapters. How is your approach different?
Reynolds: Personal relationships count more than I think people may understand in trade talks and trade relationships. So, it was a privilege to be able to be in India when we were in opposition as the Labour Party; to meet for the first time Minister Goyal and say, “If the Conservative government, the Rishi Sunak government, can do this trade deal, and we were to win the election, we’ll implement it. We want to give you that space to get it done.” Now, unfortunately, they couldn’t get it done. So, we promised that we would return and resume it if needed.
What is different on the UK side now is that the political stability is much better. A clear, decisive election result shows that we had a few too many prime ministers in a short space of time before that election. Second, this government is much more open to the rest of the world. So, we want to rebuild that relationship with the European Union without returning to the arguments about being part of the European Union.
We want to have a pragmatic level of engagement with China. We’re, of course, engaged already with the new US administration. We have great trade talks with the Gulf Cooperation Council. But this deal in particular is both of a size and benefit to both countries and in a complementary way. There are always difficult issues in a trade negotiation. But the natural complementary nature of our two economies is really exciting. So, we’re in a better position to get this done.
Q: I would also like to ask about the UK seeking significant cuts in certain trade sectors. Which would be your priority sectors?
Reynolds: There’s a lot in this negotiation. It covers goods, services, investment relationships, and the flow of people between countries — business mobility, not immigration — which are really important to a successful trading relationship.
Without going into the specifics, we start from a position where India’s tariffs on UK goods are generally higher than UK tariffs on Indian goods. So, there’s a lot on that side that we’re interested in. On the other hand, there are, of course, requests from the Indian government — things that would make a difference here, and that’s what a good negotiation should be. Of course, many things make India such an attractive market for us. I mean, this is a place that appreciates good whiskey. That’s always a sign of quality and discerning people in a country. There is a whole range of other goods. But again, when I say complimentary, we have many things for which there is demand in each country, but they’re not the same. And that’s great. That gives us the chance to get this right. And it increases consumer choice. It lowers prices for everyone. It makes people better off. That’s what good trade agreements are.
Q: How would you describe the current progress? Is it 70% done? 80% done? Are you very close to the finishing line?
Reynolds: People who have observed, and there’s a huge interest here, quite rightly, in what we’ve been doing these last few days, there is a personal warmth to the negotiations. Progress has been made. There is a desire on both sides to get this done. And I know the joke has always been that a former British Prime Minister promised an agreement in place by Diwali one year. I didn’t say which year, and it’s been ongoing. But I can only tell you this trip has exceeded our expectations. I am extremely grateful to the Indian team — not just my great friend, Minister Goyal, but the entire negotiating team. Again, there is a very high-quality operation here in India, something to be proud of. So, it’s going very well; We just got to get a few issues across the line.
Q: So, you’re saying you cannot fix the timeline just yet?
Reynolds: It is always about the quality rather than the speed. We are talking about something that could be a beneficial improvement in trading terms, and it’s been for decades. So, let’s, let’s get it right.
Q: Would you be open to having a Phase 1 trade agreement, just the kind we have had with Australia? Now, we’re negotiating a comprehensive agreement with the Australian government. Is it possible to have a Phase 1 pact by the end of the year and consider the remaining issues for a larger trade deal later?
Reynolds: We can be more ambitious. The strength of our relationship, the personal relationships, and the complementary nature is to save the negotiations. This means we should go for something which makes a real difference to people in both countries, improves their lives, makes them better off, puts a few more pounds and spending power in people’s pockets. This is what makes a difference. And so, I’m confident that we can really do this.
Q: So, a Phase 1 deal is off the table. Does it have to be one full deal?
Reynolds: When you look at the level of ambition on both sides, the desire to do something of real consequence. We genuinely believe that we can get through all of the issues and get to something decisive.
Q: On the mobility front, what kind of access can Indian professionals get in the UK? Give us a sense of the kind of negotiation we’re having for greater mobility, exports, and services exports to the UK.
Reynolds: Business mobility is important to countries with strong service sectors, as we both do. Of course, we have a broader immigration policy separate from business mobility. And there’s been some unhappiness at times in India. Maybe it has been wrongly portrayed and misunderstood in terms of the talks. And you’re correct to say it’s about that business mobility side of it. Of course, if you look at the current visa arrangements in the UK, India quite rightly gets the lion’s share of most of those, whether visas for visits or the skilled route. So, we already have an incredibly strong relationship. And we welcome that. Again, this is an aspect of the negotiations. Still, it’s always looking for where we get the most benefit for both countries by getting a really strong, complementary relationship.
Q: What would be the most important for you as a trade minister representing the UK regarding mobility in financial services from the UK to India or, more, product lines? What is your top priority?
Reynolds: There is a lot. Without prioritising one over the other, what you need to be able to show on both sides is that there is an agreement that will make a difference. It’s not just good words. It’s not just a warm relationship that’s great. But how can we say we’ll increase access to each other’s goods and services in a way that works for both countries? So, there’s not one particular aspect, one product or one service, that takes priority. You look across it on the whole, and by doing that, this is the point of getting the whole thing done and across the line. That’s how you end up with something of real significance. You wouldn’t want just to be doing the easier things and maybe missing out on the real prize of doing it. So, doing it comprehensively in that way is the way forward.
Q: How hopeful are you of an early trade deal?
Heald: We’ve been through this before. We’ve had conversations before, but I’m slightly more optimistic than I have been. If you look at the momentum of the resumption of the negotiations, a lot of work has been put in. The new government started with the technology security initiative in July. They followed it up with bilateral meetings between ministers in India and the UK. And here we are with Reynolds flying in, spending two days sitting down with the minister of commerce and industry.
Q: Considering the current geopolitical and economic environment, what would be the three top asks of the UK industry?
Heald: I think the ask of the UK industry really hasn’t changed in terms of wanting a more open access point, looking at certain tariffs, elements of collaboration and cooperation, ease of doing business, which I know isn’t part of the FTA, but continued progress on that, as well as elements like BIT, which again, isn’t part of the FTA, but is part and parcel, investor protection is an essential psychological point as well. So, there’s a whole package of elements that come into the FTA, some are in it, some are not.
Q: In terms of product lines, could you give us a sense of which product lines or areas the UK industry is demanding more market access, both through the reduction of tariffs and non-tariff barriers?
Heald: I don’t think demanding is a word I would use. The UK industry wants to get more involved in India. You’re talking about collaboration between the world’s fifth and sixth-largest economies. You mentioned $20 billion worth of trade, but I would also talk about $40 billion worth of trade and goods and services. So, we do a lot together. Demanding is not the right word, but collaboration and cooperation are the key takeaways of the FTA and what we want to achieve. We want collaboration and cooperation in those future-focused industries and sectors where we can work together in mutually beneficial ways.
Q: So, you’re talking about future areas of technology. Will they be part of the FTA — areas such as artificial intelligence?
Heald: Yes. If you look at the TSI, the technology security initiative. In that case, whether specifically mentioned or not, those are areas. Still, the chapters will certainly encourage collaboration in those areas. It’s technology, it’s drones, it’s aerospace and defence, it’s low-level satellites, satellites, quantum, these are areas where we can collaborate in a way that really will make a difference.
Watch the accompanying video for the entire discussion.
