UK and India is the verge of having a UK-India FTA (free trade agreement) which will be beneficial for both side in there respective trades. this agreement will benefit both the countries in the field of export and imports , aims for “tariff-free”. increasing the opportunities for countries to export and import other good that will benefit both the countries and maintain the economic balance. yet no official confirmation of FTA has been confirmed.
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UK-India FTA
Free trade agreement with United Kingdom is one of the great milestone which will beneficial for India in terms of exports of new good in textile , automotive parts , leathers and other products which will be beneficial for new startup businesses and small scale industries . And due to imposition of low tariff rates on each other it would develop a economic and financial balance between the countries
Importance and significance of the agreement
From the past data, it is clear that UK and India has a good trade relationship from the past which has grown dynamically from 2021. the below data shoes about the Bilateral trade in USD :
| Year | Trade Value | Currency |
|---|---|---|
| 2021–22 | 17.5 billion | USD |
| 2022–23 | 20.36 billion | USD |
| 2023–24 | 21.34 billion | USD |
| 2024 | 56.68 billion | USD |
Above data shows the relationship between UK and India in the trade, thus this new FTA will bring more opportunities in both the countries, approximately bilateral trade in India and UK about 60 billion USD . thus this new free trade agreement will increase the bilateral trade economy by almost half of total trade between this two countries.
Lie behind of FTA
UK-India FTA is seen having a lie behind due uncertainties in the trade as from the tariff cries seen from US president Donald Trump.
Possible outcomes from the FTA
UK-India FTA (free trade agreement) will provide the possible outcomes as listed below:-
- UK government mention that India would be beneficial as 90% of the exports will have extreme low tariff rates and to some having tariff free products.
- India will get new opportunities in exporting of new products such as textile, automotive sector, clothing ,etc.
- India working provisions will not pay the contribution on social securities for three years.
- India will get beneficial in sector of automotive engineering, agriculture, and varius small and medium scale industries.
- Detail are yet to be published , the other outcomes will be provided in publications.
Various industries response to FTA
The industries in India is optimistic about the free trade agreement in India , which would create a massive raise in export and trade. thus it would create the major impact on the competition of the trade on the other countries, especially the competitors of India.
| Export Sector | Top Competitor Countries | Remarks |
|---|---|---|
| Textiles & Garments | Bangladesh, Vietnam, China | Bangladesh offers low labor costs; Vietnam is strong in synthetics. |
| Pharmaceuticals | China, Germany, Switzerland, Israel | India dominates generics; China leads in APIs; Europe excels in innovation. |
| IT & Software Services | Philippines, Ireland, Poland, Ukraine | Philippines strong in BPO; Eastern Europe rising in development services. |
| Engineering Goods | China, Germany, South Korea | China has scale; Germany for quality; Korea for electronics/auto parts. |
| Gems & Jewellery | China, Thailand, UAE | UAE is a trade hub; Thailand specializes in fine jewelry. |
| Agricultural Products | Thailand, Vietnam, Sri Lanka, Indonesia, China | India leads in rice and spices; others compete on quality and price. |
| Petroleum Products | Saudi Arabia, UAE, Russia, Singapore | India refines and exports; others have larger reserves or refining capacity. |
Above data shows the major competitor of India in exports and trade. thus, this free trade agreement will influence the overall impact of trade in India and economy in UK-India FTA
Worries in this FTA
Many farmers and small scale industries and enterprises are raising concerns about the failure of this FTA as per the record of past agreement with the other countries which lead to the crash in the price and selling prices.
Conclusion
The UK-India FTA can potentially redesign economic relations, increase trade, and open up new opportunities—particularly in manufacturing and technology. But it has to be done cautiously, taking care that the domestic industry is not harmed and the benefits are distributed equally.
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