UK-India FTA to double bilateral trade by 2030, boost key exports: S&P
In 2024, India exported about $14 billion worth of goods to the UK, while UK exports to India stood at $9 billion. The agreement aims to double bilateral trade in goods and services by 2030, up from $56.7 billion in 2024.
The UK deal may create or expand the market for key Indian exports facing access hurdles to the US—India’s largest single-country export destination—due to the announced US tariffs, even if the announced reciprocal tariff of 26 per cent on India is lowered because of US domestic legal challenges or the ongoing US-India trade negotiations, authors Raj Badiani, Jan Gerhard, Deepa Kumar, Hanna Luchnikava-Schorsch and Shuchita Shukla said in a blog post on S&P Global Market Intelligence.
The UK-India FTA is set to boost Indian merchandise exports, especially textiles and apparel, according to S&P Global Market Intelligence.
It supports remittances and Indian worker mobility while offering the UK marginal GDP gains and greater access to India’s middle class.
Key policy issues like carbon tax exemptions and a Bilateral Investment Treaty remain under negotiation outside the FTA.
The increased mobility of Indian workers in the UK and savings from the national insurance scheme waiver for ICT workers for up to three years is likely to boost Indian remittances from abroad, supporting the country’s current account and domestic consumption. It is expected to support remittances—valued at $130 billion in 2024 (3.3 per cent of GDP)—with the UK being the third-largest source after the US and UAE.
For the UK, the agreement is likely to deliver marginal but growing GDP gains through phased tariff elimination over the next decade. It is also expected to benefit from access to India’s expanding middle class and supports the UK’s post-Brexit trade diversification strategy.
Key UK-India policy differences will be addressed outside the FTA framework. A social security pact signed on May 6 exempts intra-company transferees from national insurance contributions for three years, while UK visas for Indian professionals in select sectors will be expedited.
Negotiations are ongoing regarding exemption of Indian exports from the UK’s planned carbon tax and the finalisation of a Bilateral Investment Treaty.
Fibre2Fashion News Desk (SG)
