UK-India trade deal could be agreed by the end of the year, Chancellor Jeremy Hunt has indicated.
He said there was “real political momentum” behind a deal but the next few weeks would be crucial.
Prime Minister Rishi Sunak, who was at the G20 summit in New Delhi over the weekend, has been invited to return to the country, something which has fuelled speculation about a trade deal.
The prospect of Mr Sunak taking up the offer of an “early” trip back to India for talks with counterpart Narendra Modi raises the possibility that a breakthrough on a UK-India free trade agreement could be approaching.
Mr Hunt, who was on a separate visit to India for talks on economic co-operation, said neither side would “sign anything in a hurry” and a deal would need to work for both the UK and India.
Asked if they could agree on a deal by the end of the year, he told Bloomberg: “We could, but I think it just depends on what happens in the next few weeks.
“What I would say is I sense real political momentum.
“I think both prime ministers would like to see if there’s a way to do a deal.”
Downing Street warned that “a deal is not a given” and there remained a lot of hard work to do.
Mr Hunt’s visit saw an announcement that Indian firms could soon be listed in London following recent changes to the country’s regulation to allow domestic companies access to global markets.
A new UK-India pensions and insurance partnership will also increase ties in the financial services industry.
Meanwhile, Mr Hunt again played down the prospect of tax giveaways in his upcoming autumn statement, insisting that tackling inflation must be the main priority.
Ahead of the November 22 statement he indicated he would not have much room for manoeuvre on the public finances, saying: “Since the spring Budget when the last numbers were published, we’ve seen inflation stickier than was forecast at the time and that means debt interest payments are higher.”
He added: “Our priority is to bring down inflation. And when you’re trying to bring down inflation, you have to be really careful not to pump extra money into the economy, much as you would like to, not to pump extra money into people’s pockets because that can push up prices and keep inflation higher for longer.
“So the one thing I can absolutely say is that our focus at the autumn statement will be on bringing down inflation and delivering both the Prime Minister’s goal to halve inflation and the Bank of England’s target to get it down to 2%.”