UK business set to gain big from India trade deal, says minister
UK firms in financial services, pharmaceuticals and education are poised to benefit from a long-awaited free trade agreement (FTA) with India, according to India’s minister of commerce and industry, Piyush Goyal, who described the two nations as “very complimentary” and “comfortable working with eachother”.
Speaking at the India Global Forum in London on Wednesday, Goyal laid out a clear case for UK businesses to embrace opportunities in India – the world’s fastest-growing large economy.
“India and the UK are very complimentary“, the minister told Morning Wire. “There’s hardly anything I can see where we compete with each other, or where we create any sort of disruption to each other’s economies”.
But, the deal has garnered criticism over its long timeline and lack of detail thus far, especially as political cycles on both sides of the deal loom large.
Questions have also been raised about whether it will deliver real, measurable gains for UK businesses, particularly SMEs.
Finance, education and pharma: the big UK winners
Goyal highlighted key sectors and UK businesses that stand to gain significantly from the deal.
He said India’s fast-growing middle class, large-scale digital infrastructure, and youthful demographics, make it an ideal market for British exports and services.
“It’s a win-win partnership”, he told Morning Wire. “UK’s innovation, financial services, insurance, banking – they can play an important role in our growth story”.
In particular, he pointed to pharmaceuticals as an area with transformative potential, suggesting UK drug firms could drive down costs and scale internationally by manufacturing and innovating in India.
“The pharma sector would be one sector which would gain if they were to look at moving some of their design or innovation and R&D into India”, he said.
While the deal promises mutual benefit, however, the final agreement will have to navigate sensitive areas like rules of origin and digital data governance.
“If they were to start marketing at competitive prices some of the highly innovative stuff they’ve done, they’ll get such a large market that they can become more affordable – not only for India, but for the whole world”.
Investment momentum underway
Despite the FTA still being finalised, business activity between both countries is gearing up.
Goyal noted that Indian investment into the UK has recently overtaken British investment into India, a sign of confidence in the UK economy and strong bilateral business ties.
He claimed: “These are two economies who understand eachother, two sets of business persons who are comfortable with eachother”.
He also told Morning Wire: “India today is not just a capital-starved country, which it was until a few years or a couple of decades (ago). India today has capital to provide to other countries, and to look global, not just inward.”
He stressed that the FTA isn’t expected to require heavy regulatory challenges for sectors like financial services.
“This doesn’t call for any regulatory challenges, it calls for harmonising the work that both countries are doing”, Goyal claimed, citing HSBC’s recent approval to open 20 new Indian branches as proof that British financial services are already making inroads – a trend he says the FTA will accelerate.
India’s scale, UK’s skills
As UK firms look to ride the wave of India’s growth, Goyal urged them to move quickly, saying that “India is in a sweet spot”.
With India’s population of 1.4bn and average age of just above 28, the country presents a growth engine, and perhaps a solution for ageing Western economies.
“It’s a very youthful population, and we can add a lot of value to particularly Europe and many other developed countries”, Goyal said.
What’s more, he encouraged more collaboration between UK and Indian institutions, pointing to higher education and legal services as untapped areas for expansion.
“We should look at the Oxford and Cambridge universities setting up campuses in India, partnering with highly reputed universities in India”, he told Morning Wire.