Shift in India's global trade architecture

The recently-concluded Free Trade Agreement (FTA) between India and the UK marks a critical shift in India's global trade architecture—expanding its reach into a major European economy while signalling a willingness to negotiate complex regulatory frameworks.

- Shivaji Sarkar

India-UK bilateral trade stood at $21.34 billion in 2024, with Indian exports to the UK rising by 12.6% to $14.5 billion, and imports marginally increasing by 2.3% to $8.6 billion. The trade balance currently tilts in India’s favour, showing a surplus of $5.94 billion. With the FTA, both countries aim to more than double trade volumes to $112 billion by 2030.

The agreement could lead to a shift in the Indian trade surplus as certain UK exports, such as automobiles, alcoholic beverages, and machinery, may see reduced barriers and increased access to the Indian market. The UK sees a substantial increase in exports to India. According to the UK government impact assessment, India’s demand for global imports is estimated to increase to £2.8 trillion by 2050, making it the third largest importer in the world. The FTA’s improved market access and reduced regulation are expected to create major opportunities for UK businesses and consumers, the UK perceives.