The UK-India Free Trade Agreement (FTA), a key trade deal that could significantly reshape bilateral economic relations, is set to relaunch in early 2025. This announcement comes after a high-level meeting between UK Prime Minister Keir Starmer and Indian Prime Minister Narendra Modi on the sidelines of the G20 summit, signalling renewed commitment from both nations to enhance their economic and strategic partnership.
The relaunch of the UK-India FTA negotiations represents an important move in strengthening the UK’s global trading position. The deal holds the promise of not only boosting trade but also fostering closer ties in areas such as security, technology, education, and climate change.
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Strategic Significance of the UK-India FTA
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Prime Minister Keir Starmer underlined the importance of the UK’s international trade relationships, noting that they are essential for driving domestic economic growth. “Boosting economic growth is key to improving living standards for working people. A new trade deal with India will support jobs and prosperity in the UK,” Starmer said, underscoring the positive impact an FTA could have on both countries. As the fifth-largest economy in the world, India is a vital partner for the UK, and the proposed deal aims to create jobs, enhance investment, and improve market access for both nations.
The FTA negotiations, which initially began in January 2022, were temporarily stalled due to elections in both countries. However, with both Prime Ministers now firmly committed to reaching a final agreement, there is optimism that the deal will be completed early next year.
Current State of Trade and Economic Cooperation
As of 2023-24, trade between the UK and India reached a substantial USD 21.34 billion, showing significant growth from the previous year. UK exports to India alone accounted for USD 16.6 billion. This robust trade relationship forms the foundation for the FTA discussions, with both governments eager to build on these figures.
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