India-UK trade deal: Stay focused on the long-term prize

The recently announced deal is expected to increase bilateral trade by £25.5, the UK’s gross domestic product (GDP) by £4.8 billion and wages by £2.2 billion each year in the long run.

The UK-India economic corridor has always been one of huge potential and promise. India is the world’s fastest-growing major economy, home to a dynamic, tech-savvy population and an expanding middle class. The UK, meanwhile, is a global services powerhouse, with world-leading capabilities in finance, education, sustainability, healthcare and innovation.

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An agreement that meaningfully reduces barriers, builds on complementary strengths and leverages the ‘living bridge’ of the 1.5 million Indian diaspora in the UK will unleash a new era of growth, job creation and innovation on both sides.

India is one of the largest contributors of foreign direct investment in the UK, second only to the US, in terms of the size of companies and number of projects. Global companies like Tata, Mahindra, Essar, Piramal, Biocon, Wockhart, Serum Institute, Bharti Enterprises, State Bank of India and many more are embedded in the UK’s economic and strategic landscape.

At the same time, there is so much more the two countries can achieve together.

What business wants: The UK India Business Council works closely with business in both countries. Our regular engagement with businesses of all sizes—both British companies that operate in India and Indian investors in the UK—makes it clear: firms are optimistic, but eager for progress on practical issues. They’re looking for streamlined customs procedures, predictable regulations and stronger data and intellectual property protection. Crucially, they want improved mobility for skilled professionals and more certainty around digital trade and data flows.

These may sound like technical details, but they have real-world implications for investment decisions, job creation and competitiveness.

This robust deal will give businesses the clarity and confidence they need to expand, hire and innovate. We help British companies understand the Indian opportunity better and update how they see Indian markets. India is not simply a market, but a strategic partner—part of the research and development (R&D) chain, technology chain, talent chain and supply chain.

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The bigger picture: Beyond economics, the landmark deal is a strategic milestone, signalling the UK’s serious commitment to the Indo-Pacific and enhancing its reliability as a long-term partner to India.

For India, it’s a chance to deepen ties with a like-minded democracy with global reach—at a time when supply chain resilience, trusted digital partnerships and green transitions are on top of the policy agenda.

It also represents a win for our commonly shared values. A well-crafted deal can support inclusive and sustainable growth, elevate labour and environmental standards and foster collaboration in areas like education, R&D and clean energy.

The two countries already have a long-standing partnership, for example in healthcare. The successful development of life-saving RTS, S and R21 malaria vaccines help address a global challenge. We could take this a step further, enhance it by doing more UK clinical trials in India, share risks on healthcare research and support the transfer of knowledge.

On climate change, the UK is investing to support cutting-edge sustainability technology, even as its banks provide billions in climate financing to India. The UKIBC’s university members are joining Indian industry to help develop Indian talent for India and the world, and by partnering with Indian universities, they can offer world-class higher education and skills through innovative transnational education.

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The year 2024 and now 2025 have been peppered with strategic visits. The UK’s secretary of state for foreign affairs David Lammy in New Delhi in less than one month of taking charge to sign the Technology Security Initiative, both prime ministers meeting at the G20 summit, India’s minister of external affairs and recently finance and commerce ministers visiting London, and the British energy secretary and business secretary visiting India in the past months are all indications of growth in the partnership.

Focus on the prize: The persistence and resilience exhibited by the negotiating teams of both countries deserves praise. Negotiating a trade deal is never easy, especially between two large and complex economies. Now that they’ve agreed, both governments should keep their eyes on the long-term prize. The momentum is real, the business appetite is strong and the potential gains are immense. With an agreement in place, we have an opportunity to unlock the full potential of UK-India trade, together. Let’s do it now.

The author is chair, UK India Business Council (UKIBC).