British estimates project the deal will boost bilateral trade by £25.5 billion (US$34.13 billion) annually by 2040. Trade between the two countries reached £42.6 billion last year, making India the UK’s 11th-largest trading partner.
“I think this [India-UK FTA] is also about signalling from India that it is open to better integrating with the global economy – that it is ready to sign difficult trade agreements,” said Harsh Pant, a professor of international relations at King’s College London.
If approved by the British parliament and India’s federal cabinet, the agreement would take effect within a year, removing trade barriers and granting duty-free access to most goods.
India has had a mixed track record with free-trade agreements, with several deals over the past two decades leading to persistent trade deficits and, in some cases, domestic backlash from industries and states concerned about import surges.
