The news that the UK had finally completed a Free Trade Agreement (FTA) with India should give a much needed boost to UK firms of all sizes. The deal, which took three years to negotiate, could herald a new era of free trade between the UK and one of the most dynamic growing economies in the world.
Certainly that was the message from UK PM Keir Starmer, who said, “Today we have agreed a landmark deal with India – one of the fastest growing economies in the world, which will grow the economy and deliver for British people and business.”
The government estimates that the FTA will increase bilateral trade by £25.5 billion, UK GDP by £4.8 billion and wages by £2.2 billion each year in the long run. Under the terms of the deal, barriers to trading will be dropped, with India agreeing to reduce tariffs on a range of products including whisky, medical devices, advanced machinery, and lamb, making UK exports more competitive.
The government says that, ‘Based on 2022 trade alone, this amounts to India cutting tariffs worth over £400 million when the deal comes into force, which will more than double to around £900 million after 10 years.’
This deal is great news for both UK businesses and those looking to locate in the country,” says Paul Beare. “It removes many of the barriers that can sometimes block trade and commerce, so in that respect it could represent a huge shot in the arm for UK businesses. We work with lots of growing firms that are focused on expanding internationally – either from overseas into the UK, or vice versa – so the more trade barriers that come down, the better news for them.
That sentiment was echoed by Business and Trade Secretary Jonathan Reynolds, who said, “By striking a new trade deal with the fastest-growing economy in the world, we are delivering billions for the UK economy and wages every year and unlocking growth in every corner of the country, from advanced manufacturing in the North East to whisky distilleries in Scotland. In times of global uncertainty, a pragmatic approach to global trade that provides businesses and consumers with stability is more important than ever.”
According to the government, several of the UK’s high-growth sectors identified in the Industrial Strategy will be supported through this deal, including:
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Tariffs cut on the UK’s large and varied advanced manufacturing sectors from aerospace and automotive, electrical circuits and conductors, and high-end optical products.
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The clean energy industry will have brand new, unprecedented access to India’s vast procurement market as the country makes the switch to renewable energy and continues to see growing energy demand.
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Reduced tariffs on medical devices that take the UK’s complex supply chains into consideration will unleash new opportunities for the UK life sciences sector.
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Enhanced copyright protections for the creative sector will give exporters confidence thanks to a commitment that their work will continue to be protected for at least 60 years.
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World-class UK services sectors – who export just over £500 billion worldwide will now benefit from market certainty when trading into the growing Indian market.
“There’s no doubt India represents a really exciting market for the UK,” says Paul Beare. “Obviously there are many historical ties but modern India is a very dynamic and innovative place. Given our work with businesses from all over the world – Australia, New Zealand the US in particular – it’s really encouraging to see the trade ties being renewed.
We’re expecting more Indian firms to look towards to the UK to trade and invest in, and when they do, we’ll be available to help them set up and really power on for growth.