UK-India FTA: What’s in Store?
I’ve participated in many an event covering India during my time with CFOC. From our webinar with Bob Blackman MP regarding future UK-India relations to our continued work and podcast episodes with Bharatvaarta discussing India’s agricultural reforms and political affairs.
So, you can imagine our excitement when the Secretary of State formally launched trade negotiations during her visit to Delhi this year with negotiating rounds taking place approximately every five weeks. The Indian negotiating team will be led by Nidhi Mani Tripathi, Joint Secretary, Department of Commerce and the UK negotiating team will be led by Harjinder Kang, Director for India Negotiations at the Department for International Trade, who has clearly had a very successful first round of talks.
Fast forward several months, and the Prime Minster continues to press ahead with talks during his visit to New Delhi, demonstrating his determination to focus on investment, jobs and security. Modhi had been keen to make increased access to the UK for its citizens part of any trade agreement, and Johnson signalled this month he was willing to make concessions in this area – something previous UK governments had refused to do.
Why is this FTA so important? Well, India is estimated to be the worlds third largest economy by 2050 (5th in 2019 with a GDP of £2.25 trillion). In 2020, India was the UK’s 15th largest trading partner with 63,000 UK jobs directly/indirectly supported by exports to India in 2016. Department of Trade modelling (subject to the outcome of the agreement) suggests a Free Trade Agreement could boost UK GDP by around £3.3 billion in 2035, up to around £6.2 billion in 2035, which is equivalent to an increase in UK GDP of between 0.12% and 0.22%.
Furthermore, projected trade with India could increase by around £14 billion in 2035 to around £27.7 billion in 2035 and UK exports to India could increase by around £8.8 billion in 2035. In addition, India’s GDP could also increase by £3.7 billion in 2035 up to £8.6 billion too; this is equivalent to an increase in India’s GDP of between 0.07% and 0.16% in the long run.
The figures look promising, but what does it mean in a nutshell? It means reduced/removal of barriers to trade in goods, growing middle class for British firms to tap into, more collaboration and encouragement of regularity alignment, increased collaboration between Higher Education institutions, new jobs and levelling up SMEs.
This FTA could also increase consumer choice, boost trade in environmental goods and ultimately unlock additional growth across a wide range of sectors. CFOC will continue to monitor the progress between both states on this important trade negotiation.
Roshan Cariappa, Bharatvaarta, said:
“India and the United Kingdom have strong trading links with several mutual interests and complementary business strengths. The two societies are quite closely connected and this manifests into strong trade opportunities naturally.
We believe that singing Free Trade Agreements and Comprehensive Economic Partnership Agreements will help Indian firms get access to new markets and Indian Consumers access to leading global product innovations. We believe that the FTA with the UK is important for future growth and hope that the deal is signed soon, preferably 2022.”
Here at CFOC, we’ll continue to monitor the negotiations, with the next being held in March 2022, and hold a shared ambition with India to conclude negotiations by the end of 2022 with a Trade Agreement which further cements close ties and ensures a better future for both nations within the Commonwealth.
We had our COO, Sunil Sharma feature on GB News to discuss an UK-India deal, the full details of what he thought can be seen on the link below (he starts at the 1 hour 48 minute mark).