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GLOBAL LEADERSHIP INDIA & UK TRADE
48
protections for innovators in the
Indian market.
“As one of the UK’s largest
exporting sectors, it’s disappointing
that this deal seemingly won’t
support the UK’s growth ambitions
for pharmaceuticals,” said Richard
Torbett, ABPI chief executive.
“Robust intellectual property
protections are fundamental for the
innovation our companies deliver,
but we believe an opportunity
has been missed by the UK to
demonstrate a commitment to
high IP standards for our sector
in this agreement. We urge the
government to use ongoing
negotiations with other key trading
partners, including the EU, US, and
Switzerland, to deliver agreements
that better support Britain’s
pharmaceutical industry.”
David Henig, UK director
at the European Centre for
International Political Economy,
also has reservations, describing
the treaty as “very much a tari
reduction deal, with no mention
of data or nancial services”. But
he added, “that’s always been the
most realistic landing zone. Talk of
incredible levels of ambition always
seemed unwise.”
WIDESPREAD APPROVAL
However, in general the arrival of
the FTA – which followed a nal
round of negotiations between the
UK’s Business and Trade Secretary
Jonathan Reynolds and India’s
Commerce Minister Piyush Goyal
– has won widespread approval
after being lauded as “the biggest
and most economically signicant
bilateral trade deal the UK has
done since leaving the EU” by the
Department for Business and Trade
in London.
Marco Forgione, director
general of the Chartered Institute
of Export & International Trade,
said the agreement represented
“welcome news to our members
and the wider business community.
It is a strong example of what can
be done when good will and mutual
benets between trading partners
are clear. With UK industries, such
as automotive, currently feeling the
challenges of the US taris, this deal
comes at an opportune moment
for a range of goods and services
industries. With the deal due to
increase bilateral trade between
the UK and India by £25.5 billion,
there are signicant gains to be
seized upon by British businesses
right across the UK’s nations
and regions. The benets of our
world-leading services businesses
now having access to India’s £1.5
trillion services sector, and one that
is growing at nearly 8% a year, is
not to be underestimated.”
Emma Rowland, trade policy
adviser at the Institute of Directors,
agreed that the pact oered new
opportunities and easier access for
exporters looking for growth. “With
signicant growth prospects on the
horizon and a rising consumer base,
India is an attractive place for UK
companies to do business,” she said.
“The global trading environment
is currently an unstable one,
with greater fragmentation and
increased levels of protectionism.
In light of recent trade wars
and US tari related disruption,
new partnerships that encourage
free and open trade should be
celebrated.”
The deal with the UK could
also open up fresh opportunities
for India, not least the possibility of
securing an FTA with the European
Union, which has been the subject
of on-o negotiations since 2012.
Himanshu Tewari, a partner
specialising in trade and customs at
KPMG India, points out that the
agreement with the UK comes on
the heels of several other trade deals
the Delhi government has reached
in the recent past, starting with
Australia and followed by the UAE,
and with the four members of the
European Free Trade Association:
Norway, Switzerland, Liechtenstein
and Iceland.
“It demonstrates a very
deliberate and sure-footed approach
of expanding India’s FTA footprint
for gaining market access for goods
of Indian origin and opening new
avenues of growth and international
cooperation,” he says.
“Successful negotiation of
the FTA with the UK – till most
recently being part of the EU –
also bodes well for the progress that
India will be able to make with EU
FTA negotiations, which have been
waiting for a decisive push after the
past thirteen years of negotiations.”
Viraj Mehta, the World
Economic Forum’s head of the
regional agenda for India and
South Asia oered his perspective.
“The deal between India and the
UK is particularly important in a
global environment of rising trade
tensions and highlights the critical
role of partnerships for shared
progress and prosperity. India is a
key growth engine for the world.”
And the Brits are pinning their
hopes on the FTA generating some
key growth for them, too.
and jewellery arriving in the UK
from India; and on whisky, gin,
aerospace, electricals, medical
devices, some foodstus and cars
going the other way.
One major – and mildly
controversial – concession made by
the British was to free intra-company
transfers coming from India,
along with other Indian business
professionals arriving on temporary
visas, from having to make national
insurance contributions in the UK
for up to three years, as long as they
were still making social security
payments in India.
GREATER BUSINESS
MOBILITY
Some opposition MPs maintained
that such a concession would lead
to a surge in immigration and
undercut British workers. But the
government emphasised that the
FTA preserved the UK’s existing
points-based immigration system.
And Douglas Alexander, Minister of
State at the Department for Business
and Trade, pointed out that the deal
only covered business mobility as
it was about travel for specic and
temporary business purposes.
The government in London
estimates that the eects of the
deal will boost trade between the
two countries, which totalled £42.6
billion last year, by an additional
£25.5 billion a year by 2040.
According to The Times of India,
the FTA not only marks a signicant
milestone in bilateral relations, but
also greatly enhances professional
mobility between the two nations.
“This agreement will facilitate the
movement of various professionals,
including contractual service
suppliers, business visitors, investors,
intra-corporate transferees, and
independent professionals,” the
newspaper commented.
It added that the deal would make
it simpler for Indian professionals
to work in the UK by introducing
rules that streamlined employment
laws and visa procedures. “Under
business mobility options, the
UK has increased the range of
occupations for which highly
qualied Indian experts can apply.
However, to utilise these expanded
routes, professionals must prove
they have the necessary experience
and qualications for those specic
roles, as the UK will require them to
meet strict standards before allowing
them to work in the country.”
HR professionals in the UK
believe the trade deal oers
businesses the opportunity to
address skills shortages and cut
costs, but only if recruitment
strategies and auxiliary risks are
properly managed.
“Employers need to be
wary of, and manage, wider
discrimination risks such as how
dierent nationalities are treated
in terms of job opportunities
and recruitment processes, plus,
how certain nationalities might
be treated by colleagues during
employment because of perceived
preferential treatment,” said Rob
Smedley, employment director at
law rm Freeths, which specialises
in business legal services in
HR Magazine.
Ashley Stothard, immigration
executive at the rm, added that,
if HR management is executed
eectively, the FTA oers businesses
an opportunity to address skills
shortages, especially in sectors such
as IT, engineering and healthcare.
“These sectors often struggle to
source workers from the resident
labour market and so often look
overseas. The trade deal means
that UK businesses can look rst
to India, and benet from the
cost savings in national insurance
contributions,” he said, adding
that HR professionals would need
to review their organisations’
recruitment strategy. “They should
ensure that they’re up-to-date
with immigration law and sponsor
compliance, and prepare for an
increase in overseas recruitment.”
SECTORS VOICE
CONCERNS
Yet not all sectors in the UK
economy are happy with the
deal, notably the pharmaceutical
industry, which does not believe it
oers sucient support to businesses
beyond the reduction in medical
devices taris. The Association of
the British Pharmaceutical Industry
(ABPI) is particularly concerned
that the FTA does not address areas
such as intellectual property (IP)
06/05/2025. London,
United Kingdom. Prime
Minister Keir Starmer calls
Narendra Modi, the Prime
Minister of India, as the
two countries announce a
trade agreement.
Picture by Simon Dawson
/ No 10 Downing Street.
“ The global trading environment is
currently an unstable one, with greater
fragmentation and increased levels of
protectionism. In light of recent trade
wars and US tariff related disruption,
new partnerships that encourage free
and open trade should be celebrated.”
EMMA ROWLAND, TRADE POLICY ADVISER
AT THE INSTITUTE OF DIRECTORS