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India & U.K. FTA & Issues

  • Published
    14th Oct, 2022

Despite the setback over SuellaBraverman's(U.K. Home Secretary) comments on Indian migrants (discomfort about “open borders" with India), officials are optimistic to conclude a framework India-UK FTA.


What are the persistent issues between India and UK?

  • Illegal Migrants
  • Mobility
  • Data Localization
  • Reducing tariffs on Scotch whisky
  • Access to legal services

About Free Trade Agreement:

  • It is a pact between two or more nations to reduce barriers to imports and exports among them.
  • Under a free trade policy, goods and services can be bought and sold across international borders with little or no government tariffs, quotas, subsidies, or prohibitions to inhibit their exchange.
  • The concept of free trade is the opposite of trade protectionism or economic isolationism.

India’s Trade with the UK:

  • The UK remained the sixth largest investor in India, with a cumulative investment of approximately USD 31.92 billion during FY 2000-22.
  • This constituted around 5.4% of the total Foreign Direct Investment (FDI) into India.
  • India’s trade in goods and services with the UK amounted to USD 31.34 billion in FY 2022, as against USD 19.51 billion in 2015.
  • 618 UK Companies have been identified in India, they together employ approximately 66 lakh people and have a combined turnover of Rs 3,634.9 billion.

Importance of Indo-UK Partnership

For the United Kingdom:

  • India is a key strategic partner for the UK in the Indo-Pacific both in terms of market share and defense.
  • For Britain, a successful conclusion of an FTA with India would provide a boost to its ‘Global Britain’ ambitions as the UK has sought to expand its markets beyond Europe since Brexit.
  • Britain has been trying to seize opportunities in the growing economies of the Indo-Pacific to cement its place on the global stage as a serious global actor.
  • The British would be better able to achieve this goal with good bilateral relations with India.

For India:

  • The UK is a regional power in the Indo-Pacific as it possesses naval facilities in Oman, Singapore, Bahrain, Kenya, and British Indian Ocean Territory.
  • The UK has also confirmed £70 million of British International Investment funding to support the usage of renewable energy in India, which will help in building renewable energy infrastructure and developing solar power in the region.
  • India has sought easy market access for Indian fisheries, pharma, and agricultural products besides duty concession for labor-intensive exports.
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