The Ideal UK-India FTA

The landing ground for a truly monumental agreement

A genuinely comprehensive UK-India Free Trade Agreement (FTA) would signal a monumental sea-change in the liberalization of global trade. It promises to be the first such agreement between India and an OECD country which would liberalize key areas such as agricultural trade, intellectual property (IP) as well as legal, financial and educational services.

India’s youthful population and diversified economy would, at last, be set on the path to deeper international integration, higher levels of foreign direct investment (FDI) and reduced internal market distortions and inefficiencies. The impact on poverty alleviation would be enormous. A comprehensive agreement would be a major coup for the UK’s new independent trade strategy, striking a deal where the US and EU could not and boosting trade by at least £28bn a year. An agreement, as our authors demonstrate, has significant potential to achieve key geopolitical objectives, including ‘friend-shoring’ key supply chains from the control of China and reducing related market distortions.

However, there remain key roadblocks in the negotiation process which threaten to neuter the liberalizing force of the agreement. For instance, if the UK does not give ground on Mode 4 Services and student visas, it will be difficult for India to give ground on legal and financial services. In this paper, our authors spell out the necessary compromises both sides will need to make to unlock talks and realize the fantastic potential of this agreement.

Lord Hannan of Kingsclere

President of IFT

The Ideal UK-India FTA