After years of faltering negotiations and missed opportunities, the UK Government has achieved what many thought unlikely — a landmark trade agreement with India, the fastest-growing economy in the G20.
In a statement to the House of Commons, the Minister for Trade Policy and Economic Security, Douglas Alexander, announced the conclusion of negotiations on what he described as “a comprehensive, modern agreement” with a country poised to become the world’s third-largest economy by 2028.
Alexander told MPs, “We have now concluded negotiations on a comprehensive, modern agreement with the fastest-growing economy in the G20.” He added that while past Governments had failed to reach an agreement with India, “this Government have today succeeded. We have brokered the most generous trade deal ever agreed by India in its history.”
The significance of this agreement extends far beyond mere symbolism. India’s economy is not only expanding rapidly, but by the end of this decade will also boast a projected 60 million middle-class consumers. Trade between the UK and India already exceeds £43 billion, but the new deal is forecast to supercharge that figure, potentially boosting bilateral trade by £25.5 billion.
According to the Government, the agreement will slash tariffs across a wide array of industries. From advanced manufacturing and aerospace to the food and beverage sectors and creative industries, UK exporters are expected to benefit immediately. “From day one of this deal coming into force, it will make trade between our countries cheaper, easier and quicker,” Alexander said.
Of particular note is the impact on services, an area in which the UK is a world leader. The agreement, as outlined by the Trade Minister, “locks in access to India’s fast-growing market” for financial and professional services firms and ensures “that UK banks and finance companies are placed on an equal footing with Indian suppliers.” Crucially, it also includes measures to facilitate the mutual recognition of professional qualifications, easing the movement of talent between the two nations.
Beyond the large corporate gains, the deal includes a dedicated push to support small and medium-sized enterprises (SMEs) entering the Indian market. “The deal we have negotiated will provide bespoke support for small and medium-sized enterprises,” said Alexander. It also includes “a firm commitment from India to address the trade barriers that those businesses face.”
This represents a major shift in the UK’s trade approach — a pivot away from the traditional focus on major firms toward an inclusive strategy that opens doors for businesses across Britain. The Trade Minister made clear that this deal “will unlock new opportunities for businesses in every part of the United Kingdom,” including “our advanced manufacturing companies in the north-east, our iconic Scottish whisky brands and our car plants in the west midlands.”
The Government estimates that over £400 million in tariffs will be eliminated in the first year alone, rising to £900 million by the tenth year. Moreover, British firms will gain access for the first time to India’s vast public procurement market. “British businesses will have guaranteed access to India’s vast procurement market… They will be able to bid for approximately 40,000 tenders worth at least £38 billion a year,” Alexander stated.
While critics often accuse trade agreements of undermining domestic standards, the Minister was clear on this point. “We have brokered a deal that protects our NHS and upholds our high food standards. It ensures that our points-based immigration system remains unaffected,” he said.
The economic advantages are substantial, but so too is the geopolitical signal. This agreement is a demonstration of Britain’s ability to operate as an independent global trading nation. The Government’s strategy of building deeper ties with large emerging economies appears to be bearing fruit.
The deal also carries historical resonance. Alexander acknowledged the cultural and demographic links between the UK and India, highlighting the “living bridge of 1.9 million people of Indian heritage living in the United Kingdom.” In a rare moment of bipartisan recognition, he paid tribute to former Prime Minister Rishi Sunak, stating, “While I do not personally lament that the right hon. Member for Richmond and Northallerton (Rishi Sunak) is no longer the UK’s Prime Minister, it would be wholly wrong of me not to acknowledge his significant achievement as the first British-Indian Prime Minister.”
The Government insists that the agreement is aligned with Labour values — a blend of economic pragmatism and principled trade. “We are using the power of international trade and investment to raise living standards here at home,” Alexander said, adding that it would contribute to the UK’s “primary mission of economic growth.”
Before ratification, the full treaty will be laid before Parliament under the Constitutional Reform and Governance Act 2010, giving MPs time to scrutinise the detail. Alexander assured the House that “the House will, of course, have the opportunity to scrutinise any legislation associated with its implementation.”
In an age of trade wars and growing global instability, the UK-India agreement marks a rare and tangible success in British foreign economic policy. As Alexander concluded: “It is a deal that affords UK businesses certainty and stability during a time of global uncertainty and instability, and a deal that will give British businesses access to one of our biggest markets abroad, while raising wages and driving growth here at home.”
This deal may well serve as the blueprint for a renewed, post-Brexit trade agenda — one that trades nostalgia for real opportunity.
