Why the trade deal with India is a strategic win for the UK

After more than three years and 14 rounds of negotiations, the UK and India have finally announced a free trade agreement – FTA. UK Prime Minister Keir Starmer will formally sign the deal on a visit to India later this year. This is the biggest and most economically significant bilateral trade deal the UK has struck since leaving the EU. It will have implications for both businesses and workers.

In 2024, the UK’s trade with India was worth 43 billion pounds – 17.1 billion pounds of exports and 25.5 pounds billion of imports. Government modelling estimates that trade between the nations will increase by as much as 39% and the UK’s GDP will expand by 4.8 billion pounds or 0.1 percentage points per year as a result.

India’s economy is growing fast. It is expected to expand by 6% annually, becoming the world’s third largest economy by 2028 after the US and China. This certainly makes the deal with the UK very timely.

With a population of more than 1.4 billion and a growing middle class, the country offers huge market potential. Its import demand is predicted to grow by 144% between 2021 and 2035. This combination of strong economic growth and increasing numbers of citizens with disposable cash makes a compelling case for the deal.

Both the UK and...

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