India is weighing a one-time settlement of its long-pending demand for billions of dollars in past dues from Vodafone Group Plc’s struggling local venture, as part of a broader effort to strengthen ties with the UK, Bloomberg reported.

The proposed resolution in the nearly ₹2 lakh crore ($22.5 billion) dispute could involve waiving interest and penalties, followed by concessions on the principal amount owed by Vodafone Idea Ltd, according to the report.

A deal would provide a much-needed lifeline to India’s third-largest wireless operator, help sustain competition in a market dominated by Reliance Jio and signal to global investors that New Delhi aims to move past its reputation for unpredictable policy shifts.

The move is also seen as a diplomatic gesture toward the UK, coming soon after the two nations signed a trade pact and ahead of British Prime Minister Keir Starmer’s visit to India this week.

With ties with the US under strain and relations with China only beginning to thaw, India may use the Vodafone Idea settlement to deepen its partnership with the UK.

Officials are drafting a framework for the settlement while considering safeguards to prevent similar claims from other telecom operators, the report added.