“The deal is now signed, sealed and delivered,” was how UK Prime Minister Keir Starmer described the free trade agreement with India, formalised after three years of negotiations and across two governments.
“This is the first, major trade deal that the UK has signed after Brexit, which took place five years ago,” said Rahul Roy Chaudhury of the International Institute for Strategic Studies in London. “And it is the first significant trade deal that India has signed with the West. Ever. As you know, there was a smaller trade deal, a few years ago with some European, not European countries like Lichtenstein.”
The FTA brings down India’s tariffs for a range of British products including automobiles and whisky. It is expected to boost job growth in the UK (India is among the largest investors in that country) and more than anything else, according to Roy Chaudhury, send a political signal to India.
“There is a momentum now to develop the relationship, to develop greater mutual trust including in areas such as defense, security, technology. And that is why we have today’s announcement for the first time of Vision 2030.”
Chaudhury underscored that “there is a strong possibility of significant defense and security partnerships and deals with India. Not because there are no challenges on the Indian side for foreign OEMs, but the fact that other countries and other companies have actually made tremendous progress in these deals. And so what we argued is that, there needs to be possibly greater risk appetite, by UK, companies in relation to investing in India.”
The last major defence deal between the two countries was 15 years ago when India procured British Hawk jet trainers. While some smaller deals have taken place, UK public limited firms are also not required by their government to do business with countries like India when there may be easier opportunities elsewhere.
Tune in for more in this conversation with Rahul Roy Chaudhury of the International Institute for Strategic Studies in London.
