Foreign Policy Watch: India – EU

India-Britain free trade agreement


From UPSC perspective, the following things are important :

Prelims level: Not much

Mains level: Paper 2- India-UK FTA


In May last year, Prime Ministers Narendra Modi and Boris Johnson announced their shared vision for a transformative decade for the India-United Kingdom partnership. These words have now been made real.

Transforming India-UK partnership

  • Doubling bilateral trade: The two leaders had declared their ambition to more than double bilateral trade by 2030, which totalled over £23 billion in 2019.
  • Reduce barriers to trade: They directed their governments to take rapid steps to reduce barriers to trade.
  • FTA: The groundwork necessary to begin work on a Free Trade Agreement (FTA) had to be prepared by the end of 2021.
  • Both governments have already taken action; for example, unlocking the export of British apples to India and enabling a greater number of Indian fisheries to export shrimp to the U.K.
  • The big next step was the launch of FTA negotiations last month.

Trade relations at present

  • Bilateral trade: The bilateral trade between the two countries stood at 15.5 billion USD in 2019-20. India has engaged with the UK in sectors like pharma, textiles, leather, industrial machinery, furniture, and toys.
    • Britain is among the top investors in India and India is the second-biggest investor and a major job creator in Britain. Recently, the Serum Institute of India has announced setting up its research facilities in the UK.
  • Indian Diaspora: Around 1.5 million people of Indian origin live in Britain. This includes 15 Members of Parliament, three members in Cabinet, and two in high office as Finance and Home Ministers.
  • India is already a big investor in the U.K. — especially in dynamic sectors such as fintech, electric vehicles, and batteries.
  • India has an extraordinary opportunity to transform its economy and society in the next 30 years, as it hits its demographic sweet spot, at the heart of the Indo-Pacific region where half the world’s people live and 50% of global economic growth is produced.

Benefits of FTA

  • A U.K.-India trade agreement will stimulate growth and employment in both countries. 
  • Lower barriers coupled with greater regulatory certainty would incentivize new small and medium-sized enterprises to export their goods and services.
  • An agreement also means Indian and British consumers see improvements in the variety and affordability of products.
  • Strategic reasons: The British Government’s Integrated Review of our overseas policy, describes the world we are in; messier, with the more geostrategic competition.
  • It is one in which two dynamic democracies such as India and the U.K. need to work closely together to promote open economies.

Consider the question “Colonial prism has long distorted the perception of India-UK relation. However, both the countries stand to gain by finding a fresh basis for sustaining bilateral relations. Comment.”  


An FTA would mark a new way of working between the U.K. and India. It gives a new framework within which the two countries can grow and flourish together, putting the colonial economic relationship where it belongs — in the history books.

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