India critical in anchoring the UK economically to the Indo-Pacific

Contact Counsellor

India critical in anchoring the UK economically to the Indo-Pacific

  • January 2022- the formal launch of negotiations for an India-United Kingdom free trade agreement (FTA) when the Commerce and Industry Minister met U.K. Secretary of State for International Trade during their visit to New Delhi.
  • A ‘new age’ free trade deal with India remains critical in anchoring the United Kingdom economically to the Indo-Pacific.


  • These negotiations aimed at achieving a “fair and balanced” FTA and cover more than 90% of tariff lines to reach the bilateral trade target of around $100 billion by 2030.
  • This pact will be a “new-age FTA” covering more than just goods, services and investments and include areas such as intellectual property rights, geographical indications, sustainability, digital technology and anti-corruption.

A Lucrative Opportunity

  • A golden opportunity to put UK businesses at the front of the queue as the Indian economy continues to grow rapidly.
  • An opportunity to unlock a huge new market for British producers and manufacturers across numerous industries from food and drink to services and automotive.

A new trade outlook

  • India is hoping to conclude its first FTA in over a decade with the UAE this year and another one with Australia.
  • The India-UK FTA will be the next in line at a time when India is demonstrating a new seriousness of purpose as it negotiates 16 new and enhancing several other trade pacts with countries like Canada, the United States, the European Union and South Korea.
  • Just before the launch of FTA talks with the UK, India and South Korea also decided to expedite the upgradation of the existing FTA(Comprehensive Economic Partnership Agreement).
  • The government is showing a new found flexibility in engaging with its partners on trade as it seeks balanced trade pacts.
  • Several agreements in the Indo-Pacific such as the Regional Comprehensive Economic Partnership (RCEP) and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) are gaining traction these days.
  • Strategic partnerships without strong economic content have no meaning in the Indo-Pacific, where China’s economic clout is growing by the day.

The reason

  • Britain made a trade pact with India one of its post-Brexit priorities as it seeks a greater role in the Indo-Pacific.
  • India is at the heart of the U.K.’s Indo-Pacific ‘tilt’, which has generated considerable interest around the world.
  • The Integrated Review (U.K.‘s national security and international policy) released in March 2021 categorically underlined that, “In the decade ahead, the UK will deepen engagement in the Indo-Pacific, establishing a greater and more persistent presence than any other European country”.
  • U.K. will also be launching trade negotiations this year with Canada, Mexico and the Gulf to underscore its ‘Global Britain” credentials.
  • A trade deal with India along with its membership in the CPTPP remains critical in anchoring the U.K. economically to the Indo-Pacific.

Many factors at play

  • A range of factors have coalesced to create an impetus for the U.K. to adopt a more robust Indo-Pacific strategy:
  1. The trading implications of Brexit,
  2. The UK’s changing approach towards China - shifting from being a major proponent of China to perhaps the most hawkish in Europe,
  3. The US & UK closest ally and security guarantor, remains firmly focused on the Indo-Pacific.
  • Like its allies in the region, the U.K. recognises the importance of a free and open Indo-Pacific to global stability and prosperity and made clear its intentions to deploy strategic assets to this end.
  • UK is also looking to amplify its efforts by entering into the regional security architecture.
  • The trilateral security partnership between Australia, UK and US (AUKUS), announced in September 2021, enabling Australia to acquire nuclear-powered submarines with assistance from the US and UK, has given London a greater voice in the region.
  • Trade and investment will be a key dimension of this UK tilt.
  • Brexit has necessitated greater access to non-EU markets, and UK’s changing relationship with China requires a diversification of trading partners.
  • This shift in focus is also driven by a recognition that the Indo-Pacific is now largely the force behind global economic growth.


  • UK is looking to leverage its historical connections, development work, and its credibility when it comes to combating climate change to help establish itself as a serious player in the region.
  • Through its Indo-Pacific tilt, UK is finally carving out a direction and purpose to its post-Brexit foreign policy.
  • This prioritization opened up a new window for India and UK to quickly finalize their FTA.
  • It is a unique “now or never” moment and the two sides seem willing to seize it despite the challenges.