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The Business and Trade Secretary Jonathan Reynolds was in New Delhi on 24th February 2025 to resume talks on a trade agreement between the UK and India.
The International Monetary Fund forecasts that India will become the world’s third-largest economy by 2028. With this growth, a trade agreement could significantly boost the UK's economy. The growing demand from Indian consumers, businesses, and the government presents a lucrative opportunity for British exporters, potentially giving them a significant advantage in this market.
In 2024, UK exporters sold £6.8 billion of goods to India, making India the UK’s 13th largest export market for goods. Despite a slight dip in exports, largely due to erratic sales of precious metals, the overall trend is promising, with UK exports to India having increased by over 50% in the past five years.
Exporters often face relatively high tariff barriers in the Indian market. According to the World Trade Organization, the trade-weighted average import tariff for India is 12%, and this barrier could be significantly reduced by the agreement being negotiated.
Leading UK exports to India include machinery (£1.1 billion in 2024), electrical machinery (£500 million), and beverages (£260 million). Notably, sales of vehicles have increased by 50% in the past three years, and aircraft sales have increased by 25%. The Department for Business and Trade is particularly excited about the considerable opportunities that exist for British exporters in the tech and life sciences sectors.
The Department for Business and Trade, a key player in the UK's trade negotiations, believes that a trade deal with India could unlock new opportunities for businesses and consumers across the UK. They foresee the agreement supporting jobs, boosting wages, and backing the high-growth sectors identified in the government’s upcoming Industrial Strategy, such as advanced manufacturing, clean energy, financial services, and professional and business services.
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