India-UK FTA signals new global trade strategy, navigates US tariffs: SBI
New Delhi: India and the United Kingdom FTA is seen as a part of a new global trade strategy that aims to reduce dependence on China, manage trade challenges from US tariffs, and help the UK reshape its economy after Brexit, according to a report by SBI Research.
The report also added that the multi-billion-pound deal will reduce tariffs on 90 per cent of traded goods, helping businesses on both sides.
It said, "FTA signal a new global trade strategy, bypassing China's dependence, navigating US tariffs and reshaping post BREXIT Britain."
The deal is also expected to increase bilateral trade between India and the UK by £25.5 billion in the long run. It will also raise the UK's GDP by £4.8 billion and push up wages by £2.2 billion every year. India is also expected to benefit in important ways, especially through stronger exports and job creation.
India's trade share with the UK has already grown from 1.69 per cent in 2022-23 to 1.91 per cent in 2024-25. Total bilateral trade stands at around USD 60 billion and is projected to double by 2030. In FY25, India's exports have grown even as imports saw a decline of 6.1 per cent.
The FTA covers goods, services, and technology, and focuses on inclusive growth, building strong supply chains, and creating jobs. The UK has opened up sectors such as information technology, finance, education, and consumer goods.
This creates opportunities for Indian exports in labor-intensive industries like textiles, toys, marine products, and auto components.
Though immigration rules remain mostly unchanged, the agreement allows limited professional movement.
The report also highlighted that around 1,800 to 2,000 visas will be given each year to Indian professionals such as chefs, musicians, and yoga instructors. This shows how the FTA also supports cultural ties between the two countries.
The prime ministers of India and the UK are expected to meet soon to officially sign the deal before it is approved by both parliaments.
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