Prime Minister Boris Johnson has begun his two-day visit to India, in the hopes of expediting a free trade agreement (FTA) worth £28 billion with the world’s sixth largest economy – by 2035. The UK-India trade and investment relationship is already worth around £24 billion and supports more than half a million jobs across the UK, providing great building blocks for the future.
The FTA is set to benefit the UK’s trade sector – ultimately the entire economy – by establishing a crucial relationship with a highly stimulated economy in India. Research reveals that India has raised over $10 billion in Q1 alone – up from $6.89 billion the same time last year. With a staggering 96 Unicorns birthed from the third-largest startup ecosystem in the world, this partnership could bolster both country’s strategic defence, diplomatic and economic partnership.
It is clear that a trade deal is of urgency to the Prime Minister – especially in light of a severe goods and resources shortage which has been heightened by the Russia-Ukraine conflict. The key topics that will be discussed during Johnson’s visit will revolve around new partnerships on trade, technology and defence.
Further, he is set to announcement major investments in India’s thriving technology sector. The country’s rapid growth in fintech and digitalisation will be the driving factor, as their digital adoption rate reaches 85% (compared to a global rate of 64%) – the UK will likely look to this as a prime example in transitioning towards an increasingly digitalised structure.
Gaurav Singh, founder of JPIN, comments on the potential FTA and what international trade means for the UK: “India is one of the world’s largest economies and presents huge potential as a key partner for trade and investment for the UK. India is a 21st century powerhouse and creating a strong UK-India trading relationship will help to fuel post-Brexit, economic recovery amidst one of the UK’s most severe cost-of-living crises to date.
“India and the UK have regularly been working to improve trade; this could really allow the UK to benefit from the immense growth India is already experiencing. Although current projections suggest the deal could be worth £28 billion by 2035, I see the potential as being much higher.
“A trade deal will open the door to 1.3 billion potential customers for UK businesses, and provide opportunities for business improvement, consolidation, foreign expansion and diversification in a rapidly growing market. India is a top priority for good reason – it is goods and resource-wealthy, growing exponentially, and will be the centre of world trade in the coming decades. Therefore, building a trading relationship here is particularly important for the UK.”