'Not transformative': Chatham House pans UK-India free trade deal; urges broader Indo-Pacific focus

Time of India

22-07-2025

(Image credits: X @ChathamHouse)
NEW DELHI: As Prime Minister Narendra Modi prepares for his highly anticipated visit to the UK to formally sign the UK-India Free Trade Agreement (FTA), a new report by leading British think tank Chatham House is urging the UK government to broaden its Indo-Pacific strategy beyond the trade deal with India.
In its latest research paper titled 'Why the Indo-Pacific should be a higher priority for the UK', the Royal Institute of International Affairs, commonly known as Chatham House, cautions against a narrow bilateral approach. It calls for deeper regional engagement across South Asia and the wider Indo-Pacific.
Authored by Chietigj Bajpaee, Olivia O'Sullivan, and Ben Bland, the paper warns that focusing solely on India risks sidelining other parts of South Asia, which are not experiencing the same economic growth.
As quoted by PTI, the report says, 'In South Asia, the UK needs to build on its successful conclusion of a limited trade deal with India to widen the scope of bilateral cooperation in a way that leverages both countries' broader foreign policy priorities (eg engagement with the US and the Global South).
'
The UK and India agreed on an FTA on May 6, with a target to double trade between the two economies to USD 120 billion by 2030.
by Taboola
by Taboola
Sponsored Links
Sponsored Links
Promoted Links
Promoted Links
You May Like
Live Update: The Strategy Uses By Successful Intraday Trader
TradeWise
Learn More
Undo
The agreement is currently undergoing 'legal scrubbing' and is expected to be formally signed during PM Modi's meeting with British prime minister Keir Starmer on Thursday.
While the report acknowledges that the FTA complements the Comprehensive Strategic Partnership launched in 2021, it argues the deal is unlikely to significantly alter the bilateral economic relationship. 'The announcement in May 2025 of the UK's conclusion of a free-trade agreement with India complements efforts to build out the Comprehensive Strategic Partnership that was agreed with New Delhi in 2021," says the report.
However, it adds, "But given India's protectionist instincts, any final deal is unlikely to be transformative for the bilateral economic relationship. That is why it is important that the UK government supports other channels that can expand trade and investment linkages, such as the Technology Security Initiative that was launched in 2024.'
Chatham House further cautions against overreliance on India's economy while neighboring countries struggle.
'More broadly, gambling on India's economy to rise more or less on its own – in the absence of similar progress in neighbouring economies – would be a poor bet,' reported PTI, citing the report.
Instead, it recommends expanding trilateral cooperation involving the UK, India, and other strategic partners such as France, Australia, and the United States. The report urges the UK to ''Expand the UK's links with India beyond the recently completed (and long-awaited) trade deal (and) pursue trilateral cooperation involving the UK, India and third-country partners such as France, Australia or the US.'
Highlighting the Indo-Pacific's global significance, the paper notes that the region is home to the majority of the world's population and is projected to contribute over 50 percent of global economic growth by 2050. Covering countries from South Asia to Southeast Asia and the Pacific, including Australia, New Zealand, and Japan, the region presents both risks and opportunities.
'The region is critical for British interests because it encompasses security risks affecting the UK, presents vital long-term economic opportunities, and is vulnerable to climate risks that – if not mitigated – will have a major impact on the world,' the report states.
Addressing the growing influence of China, the report points out that while the UK has limited capacity to shape Beijing's actions directly, it can help shape the regional environment. 'Getting its approach to the Indo-Pacific right will also help the UK to manage the challenges of a more powerful, assertive and globally influential China. Despite limited capacity to shape Beijing's actions directly, the UK can influence the neighbourhood in which China resides by working with partners to establish and enforce shared norms, and to support regional countries' sovereignty and resilience,' the authors write.
Beyond South Asia, the report identifies Australia, New Zealand, Japan, and South Korea—termed the 'Indo-Pacific Four'—as essential partners where the UK should strengthen ties, especially amid an increasingly 'volatile' US foreign policy environment. Southeast Asia is also highlighted for offering 'singular opportunities to expand UK trade and investment.'