Is the UK-India Free Trade Pact a Historic Milestone?
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Synopsis
The signing of the UK-India Free Trade Agreement (FTA) heralds a groundbreaking era of trade and investment. Discover how this deal will transform economic relations between two of the world's largest economies, creating jobs and opportunities in both nations.
Key Takeaways
- UK-India FTA is a landmark deal.
- Significant job creation potential in the UK.
- Increased market access for both nations.
- Boost to sectors like IT and education.
- Projected GDP growth for the UK.
New Delhi, July 24 (NationPress) The UK India Business Council (UKIBC) expressed its enthusiasm on Thursday regarding the signing of the UK-India Free Trade Agreement (FTA), describing it as a pivotal deal that is set to unlock extraordinary trade and investment avenues between two of the globe’s largest and most vibrant economies.
This significant agreement was inked during Indian Prime Minister Narendra Modi’s visit to the UK and is recognized by the UKIBC as a historic milestone in the bilateral relations between the two nations.
As stated by the UKIBC, India's expansive and rapidly growing economy—with a market of 1.4 billion people and a burgeoning middle class—presents substantial export and investment prospects for UK businesses. Tariff reductions anticipated under the FTA are expected to enhance UK exports significantly. The agreement is projected to attract nearly £6 billion in new investments and export opportunities, which aim to generate over 2,200 British jobs nationwide, while Indian firms expand their presence in the UK and British companies tap into new markets in India.
The FTA is also poised to deliver major advantages to India’s services sector by creating opportunities in areas such as information technology and IT-enabled services (IT/ITeS), financial services, management consultancy, architecture and engineering, other business services, and educational services. One of the most crucial aspects of the UK-India FTA is the improved market access it offers to both nations, as noted in the statement.
It is noteworthy that the total trade in goods and services (exports plus imports) between the UK and India reached £42.6 billion in the four quarters ending Q4 2024, reflecting an increase of 8.3% from the previous year. This trade volume has nearly doubled compared to pre-pandemic levels in 2019, when UK-India trade stood at £24.1 billion, according to the statement.
The economic ramifications of the India-UK FTA 2025 are substantial. It is anticipated to boost the UK’s GDP by £3.3 billion by 2035 and double bilateral trade by 2030. This growth trajectory is expected to create significant employment opportunities in India, as stated.
UKIBC Chair Richard Heald remarked, "The UK-India FTA signifies a historic milestone in our bilateral relationship. Businesses from both nations have long advocated for an agreement that lowers barriers, enhances market accessibility, and establishes a solid framework for long-term, sustainable growth. We commend both governments for their dedication and vision in successfully navigating this intricate negotiation. The success of the FTA will foster further economic progress for the world’s 4th and 6th largest economies and will catalyze collaboration in additional domains."
"As India progresses towards Viksit Bharat@2047, UKIBC and, broadly speaking, British businesses recognize that a fruitful FTA is a key milestone in a longer journey and are eager to contribute to India’s aspirations. As a trusted partner to both governments and businesses, UKIBC has actively facilitated the FTA process through consultation, policy contributions, and sector-specific insights," he added.
The UKIBC has been instrumental in advancing the FTA process, conducting consultations with industry stakeholders, providing evidence-based recommendations, and ensuring that the perspectives of UK and Indian businesses—especially mid-sized and sector-specific entities—are represented in the negotiations. As both countries prepare to implement the agreement, UKIBC will continue to assist its members in understanding and utilizing the FTA’s provisions, particularly in sectors such as digital trade, services, manufacturing, education, and innovation-led collaboration, the UKIBC statement concluded.
Point of View
I believe the UK-India Free Trade Agreement represents a significant step forward in enhancing bilateral relations. This deal not only opens doors for businesses in both countries but also signifies a commitment to fostering economic growth and collaboration. It is essential for both nations to harness this opportunity to create a sustainable and prosperous future.
NationPress
26/07/2025
Frequently Asked Questions
What are the main benefits of the UK-India Free Trade Agreement?
The UK-India Free Trade Agreement is expected to enhance market access, reduce tariffs, create over 2,200 jobs in the UK, boost UK's GDP by £3.3 billion by 2035, and double bilateral trade by 2030.
How will this agreement affect Indian businesses?
The FTA will provide Indian firms with better access to the UK market and support their expansion, ultimately leading to growth in trade and investment opportunities.
What sectors will benefit the most from this agreement?
Sectors such as information technology, financial services, professional services, and education are expected to gain significant advantages from the FTA.
How has the trade volume between the UK and India changed recently?
The total trade in goods and services between the UK and India has reached £42.6 billion, an increase of 8.3% from the previous year, showing a recovery and growth in bilateral trade.
What role does UKIBC play in this agreement?
The UK India Business Council (UKIBC) has facilitated consultations, provided recommendations, and ensured that the voices of businesses from both countries are heard during the negotiation process.
