UK-India free trade deal: A timely win for global cooperation

At last, after three years of proceeding by fits and starts, Britain's Keir Starmer and India's Narendra Modi signed a free trade deal, which the former hailed as "a landmark moment for both of our countries." Considering that exports to India account for merely 1.9% of British exports, and imports from India only 1.8% of its imports, at a cursory glance it might not seem to be much of an impact-making deal.

But what actually makes the deal path-breaking is not the actual sums involved, but the timing, it being a win for free trade at a time when US President Donald Trump's tariff campaign has raised fears of tit-for-tat trade wars, and un-leashed protectionism across all continents.

In fact, it was the prospect of a global trade war that speeded up the negotiations and induced both parties to quickly conclude the deal, thereby setting an example of mutual accommodation between two nations to be emulated by others to prevent the destabilisation of global trade due to Trump's actions.

Through this deal, coming into effect within a year, tariffs would be lower for Indian imports on British goods like gin and whisky, aerospace, electricals and medical devices, cosmetics, lamb, salmon, chocolates and biscuits, and high-value cars. British consumers would benefit from lower tariffs on goods coming from India, which will include clothing and footwear, cars, foodstuffs including frozen prawns, jewellery and gems.

No doubt, with the EU being the biggest trade partner for India, a free trade agreement between India and the EU would be more significant - yet, the UK-India deal would surely speed up the ongoing negotiations between the EU and India!

It might bring about a rethinking in Trump that he cannot always get his own way since nations are always guided by their self-interests in framing foreign and trade policies. The deal is expected to enhance trade between the UK and India, currently worth $42 bn, by an additional £25.5 bn a year by 2010.

While the deal provides for some Indian and British workers to gain from a three-year exemption from social security payments, the deal also includes provisions on the services sector and procurement, allowing British firms to compete for more contracts, implying that it will be a win for both parties, India benefiting from increased foreign investments and Britain getting a toe-hold in the expanding Indian market.

Observers expect that the deal will give new energy to the services sectors of both sides by boosting the ease of doing business while empowering the UK economy with skilled Indian talent. Both nations expect that it will catalyse trade, investment, growth, job creation, and innovation in the two economies, and make the UK and India high-priority trade partners.

Above all, such a deal will set an example to the rest of the world about the benefits of mutual cooperation.