The 24 October deadline set by Boris Johnson for finalising the UK–India trade deal will be missed after both parties have hit a roadblock in discussions.
Although a detailed reason hasn’t been given by both sides, sticking points include a steep import duty on British whisky for sale in India, and demands for more visas for Indian students and businesses.
Prime Minister Liz Truss previously hailed this deal as a prize for Britain, with India’s £2 trillion economy likely to inject £3bn into the UK’s economic growth by 2035 when it goes through.
London-based Nayan Gala, founder of global investment banking platform, JPIN, and expert on the UK–India corridor, explained to City A.M. why a UK–India trade deal is critical for Britain’s economic growth.
“India is on track to becoming the third largest economy by 2050, which is why this marks a critical period for the UK to lock in a deal as soon as possible,” Gala pointed out.
In fact, on track to become the fastest-growing economy by the end of this year, India already projected to be a fifth larger than the UK by 2027, according to the International Monetary Fund (IMF).
Gala highlighted that the UK-India relationship already supports 110,000 jobs in the UK, and foreign investment into Britain from India was worth £10.6bn in 2020, “but this could just be the beginning of an even more fruitful relationship.”
“There is a need for the UK government to forge new trade partnerships in order to not only reduce its’ trade deficit, but to also generate new opportunities beyond Europe at a time when economies around the world are facing significant macro-economic headwinds,” Gala continued.
“Finalising this trade deal could also reduce tariffs on rice, clothes and cars which could have a positive impact on households across the nation currently struggling with the cost-of-living.”
“At a time of economic uncertainty, it’s now paramount that any final details are ironed out so that an agreement can be reached which will hugely benefit both economies,” Gala concluded.