UK's global trade outlook sees India as Asia's 'standout growth engine'

Economic Times

a day ago

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As the "standout growth engine" in Asia, India is projected to be the third largest economy in the world by 2028, and the recent Free Trade Agreement (FTA) offer British businesses a "major advantage" over their international competitors, the UK's new trade strategy and outlook have said. The 'UK's Trade Strategy' and an accompanying 'Global Trade Outlook 2025' released by the Department for Business and Trade (DBT) on Wednesday spotlights the trade deal with India, concluded early last month, as the centrepiece of the Labour government's approach to utilising FTAs as an important tool to meet its economic growth agenda. "Asia is expected to benefit from standout growth from India and a new generation of fast-growing emerging markets," reads the outlook. "Asia's centre of growth is expected to shift from China to India and other emerging markets, while Africa's demographic boom could drive high growth if job creation can keep pace with population growth," it notes. About the FTA, the trade strategy points out that the "comprehensive agreement" with India is reflective of the "transformative" impact that Free Trade Agreements can make.
It reads: "For example, the UK-India FTA is a landmark trade deal that will drive growth and boost trade with one of the fastest-growing economies in the world. As soon as the deal comes into force, UK products will benefit from a saving of up to an estimated GBP 400 million a year, from India cutting its tariffs on existing trade alone, which could increase to around GBP 900 million a year after staging over 10 years. "And that's before factoring in the savings from speedier and easier trade from improved customs and digital commitments. This immediate relief represents a major advantage our businesses will enjoy over their international competitors." The trade strategy, which complements an Industrial Strategy released earlier this week, is aimed at setting a clear direction for the government's growth and job creation goals. "What works for business, works for Britain. It means more jobs, more opportunities, and more money in people's pockets. That's why I've backed British industry through global headwinds - securing major trade deals with the US, India and the EU that protect jobs and drive growth right across the country," said British Prime Minister Keir Starmer. "Broad and complex trade deals like we secured with India will bring billions to our economy every year but to deliver the Plan for Change we will strike more agile, targeted deals that exploit the sectors which drive the most growth for our economy," added Business and Trade Secretary Jonathan Reynolds. The strategy reiterates the "huge economic win" from the India FTA, which "slashes Indian tariffs on key products such as whisky, cosmetics and medical devices, locking in reductions on 90 per cent of tariff lines for UK exports to unleash opportunities for businesses across our regions and nations". "Furthermore, it delivers certainty for service suppliers, including non-discrimination commitments to support new opportunities. It delivers on our Plan for Change and is expected to increase bilateral trade by GBP 25.5 billion, increase UK GDP by GBP 4.8 billion, and boost wages by GBP 2.2 billion every year in the long run," the strategy adds. The India-UK deal is expected to be officially signed off at the end of next month following the obligatory parliamentary clearance in Britain.
"We in India have a much faster process, comparatively, so we'll be ready as soon as the legal scrubbing is done and the document is sorted out," Commerce and Industry Minister Piyush Goyal had said during his UK visit last week to discuss the next steps in the FTA.