Why India Is Warming up to a Trade Deal With the UK?
Thanks to Brexit, the UK can now build stronger relations with major economies independently. India, in particular, is a crucial partner, and their recent trade pact is a first step toward an ambitious 2030 plan. Learn more with our blog!
India is among the economic leading countries in Asia and the world by its strategic geopolitics. However, the country's position on the map creates a rivalry with China for financial leadership in Asia. After withdrawing from the China-led regional comprehensive economic partnership (RCEP), India needed to find a way to limit China's growing influence in the region by signing bilateral agreements with major economies.
Golden Opportunity for the UK
Negotiations for a trade deal between India and the European Union (EU) had stalled for several years, failing to overcome major differences over its scope. Therefore, the UK exit from the EU came timely because the British government was able to negotiate an agreement independently. This bilateral relationship was a boon because the UK was looking for new economic partnerships around the world, particularly in Asia and Africa. It is in this context that the two sides have strengthened their trade relations since the entry into force of Brexit.
The UK and India announced the Free Trade Agreement (FTA) via a virtual summit. The deal aimed to double trade between the two countries by 2030. At the meeting, the UK prime minister, Boris Johnson, and his Indian counterpart, Narendra Modi, also launched a Roadmap 2030 to expand and deepen bilateral cooperation in five areas: people-to-people relationships, trade and prosperity, defense and security, climate action, and healthcare cooperation.
“The UK and India share many fundamental values... There is a living bridge uniting the people of our countries," said the UK Prime Minister.
The UK-India FTA, which in total is expected to create more than 6,500 jobs in the UK according to the country’s government, includes a new Indian investment of £533 million in the UK. This diplomatic move seems to be a win-win partnership for both parties.
"In the coming decade, with the help of the new partnership signed today and a full free trade agreement, we will double the value of our trade with India and take the relationship between our two countries to new summits," Boris Johnson added.
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