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UK-India Agree on 90% of Trade Deal: Is This the Real Brexit Dividend?

April 10, 2025, 2:31 pm

The United Kingdom and India have reached a major milestone—agreeing on 90% of their Free Trade Agreement (FTA). Both parties are hoping to close the deal this year. The historic agreement will drastically cut tariffs on prime UK exports including Scotch whisky and cars, unlocking greater access to one of the world’s fastest-growing economies.

It also opens a new chapter in bilateral ties by enhancing trade, investment, and mobility. One of the key holdouts—mobility visas for Indian professionals—has now been largely addressed, clearing the way for closer cooperation in the services sector.

With simultaneous negotiations going on for a bilateral investment treaty, the FTA is a strategic step for both countries in the face of changing global trade patterns. For the UK, it is a major post-Brexit victory, for India, it is one element of a wider effort to diversify trade partners and enhance economic resilience.

Background

Negotiations started in January 2022. The agreement encompasses 26 chapters on goods, services, investments, and intellectual property. With time, both governments have sought to overcome sticking points. In recent times, common economic objectives and international trade pressures have sped up progress.

The mobility deal, particularly on Indian worker visas, is a significant victory. It should facilitate the movement of professionals and enhance collaboration in services. Tariff reductions are also under the spotlight. India currently has tariffs of as much as 150% on Scotch whisky and 100% on UK-produced cars. The FTA plans to reduce these levels and open up market access for British firms.

Although momentum exists, some issues persist. Whisky tariff reduction timelines remain in contention. Auto tariff negotiations and access to medicines are also being discussed. Both sides anticipate reaching a balance that will suit their domestic sectors.

UK-India Bilateral Investment Pact

Concomitant with the FTA, a bilateral investment agreement is underway. This will provide legal protections for investors on both sides. The aim here is to improve the security and predictability of the investment environment.

This close-to-final deal has broader implications. For the UK, it’s a central element of constructing post-Brexit global trade networks. For India, it’s a move towards diversifying partners in the face of increasing global uncertainty. The action is part of a rising trend—nations moving away from multilateral trade agreements towards targeted bilateral ones.

As the UK and India move toward the completion of their FTA, the stakes are high. The agreement marks increased economic integration and a common vision for growth driven by trade. Though some of the issues persist, both countries seem determined to complete the negotiations and redefine their trade relationship of the future.

Why India-New Zealand FTA Could Be a Game Change | TDG Explainer

March 20, 2025, 12:53 am

The proposed Free Trade Agreement (FTA) between India and New Zealand isn’t just another trade deal — it’s a potential goldmine waiting to be unlocked. With bilateral trade standing at a modest $1.7 billion, this agreement could explode that figure tenfold over the next decade. Imagine the scale of new opportunities: Indian pharmaceuticals in Kiwi hospitals, New Zealand’s world-class dairy products in Indian households — the possibilities are endless.

What’s In It for India?
l Tariff-Free Access – Indian exporters will get a smoother ride into New Zealand’s market, reducing costs and boosting profits.
l Tech Power-Up – New Zealand’s expertise in renewable energy and agri-tech could fuel India’s domestic production and exports.
l New Jobs & Skills – With relaxed visa rules, India’s growing pool of STEM graduates could find new opportunities in New Zealand’s booming tech and services sectors.

What’s In It for New Zealand?
l Access to 1.4 Billion Customers – India’s huge market is a golden opportunity for Kiwi agricultural and dairy producers.
l Pharma and Machinery – Indian pharma products and machinery are already gaining traction; this deal will accelerate that trend.
l Stronger Political Ties – The FTA is not just about trade; it’s about deepening strategic ties in the Indo-Pacific, where both countries face growing pressure from China.

Current Trade Status
India and New Zealand have maintained relatively modest trade volumes despite the immense potential. As of the 2023-24 financial year, bilateral trade between India and New Zealand stood at approximately $1.7 billion. India’s exports to New Zealand totaled $ 682 million in 2023, while New Zealand’s exports to India amounted to $369 million.
Notably, Indian exports to New Zealand have grown by 62% since 2019, with mineral fuels replacing pharmaceuticals as the top export item, accounting for 13% of total trade. But considering the size and diversity of both economies, this figure remains underwhelming.
The proposed FTA is a chance to change that dynamic, opening up new opportunities in agriculture, manufacturing, pharmaceuticals, tourism, and technology.

Potential Benefits of the FTA
1. Enhanced Market Access and Trade Growth
l Tariff Reduction – The FTA is expected to eliminate or reduce tariffs, thereby increasing the competitiveness of Indian exports in New Zealand and vice versa.
l Sectoral Opportunities – Indian sectors such as pharmaceuticals, textiles, and information technology stand to gain from expanded market access. Conversely, New Zealand’s dairy, agriculture, and horticulture industries could benefit from greater access to the Indian market, which has traditionally been protected by high tariffs.
2. Investment and Technology Transfer
l Foreign Direct Investment (FDI) – The agreement is likely to promote increased FDI in both countries, fostering joint ventures and facilitating technology transfer.
l Agri-Tech and Renewable Energy – Indian companies could benefit from New Zealand’s expertise in agri-tech, renewable energy, and food processing.

3. Skill Mobility and Workforce Exchange
l Professional Mobility – Provisions facilitating the mobility of professionals and skilled workers will strengthen people-to-people ties and boost the service sector.
l STEM Talent Exchange – Indian STEM graduates and IT professionals could find enhanced opportunities in New Zealand.

4. Strategic Collaboration in Critical Sectors
l Renewable Energy and Critical Minerals – Both countries have identified renewable energy and critical minerals as key areas for strategic cooperation.
l Joint Ventures – Joint ventures in solar, wind, and hydropower could accelerate India’s transition to sustainable energy.

5. Diversification of Trade Partnerships
l Economic Growth – Strengthening ties with New Zealand will help India diversify its trade partnerships, reducing reliance on major partners like China and the United States.
l Reduced Vulnerability – Diversification reduces dependency on single-market exposure, enhancing economic resilience.

Impact on Key Economic Sectors
1. Agriculture and Dairy
New Zealand is a major exporter of dairy products. India’s high tariffs on dairy have been a contentious issue in past trade talks.
A phased reduction in tariffs, coupled with domestic safeguards for Indian farmers, could create a balanced outcome.
2. Pharmaceuticals and Healthcare
India’s pharmaceutical industry, which is globally competitive, will benefit from better market access.
Regulatory harmonization and expedited approvals could further enhance growth prospects.
3. Renewable Energy and Critical Minerals
New Zealand’s expertise in clean energy and India’s growing demand for renewable energy infrastructure provide a natural synergy.
Joint ventures in solar, wind, and hydropower could accelerate India’s transition to sustainable energy.
4. Education and Tourism
New Zealand is a preferred destination for Indian students. Improved visa policies and exchange programs could increase student enrollment. Enhanced air connectivity and tourism promotion will contribute to the services trade.
5. Manufacturing and Technology
India’s “Make in India” initiative could benefit from New Zealand’s technological expertise. Lower input costs and supply chain efficiencies resulting from the FTA could enhance manufacturing competitiveness.

Risks
1. Trade Imbalance and Market
AccessIndia’s trade deficit with New Zealand could widen if dairy and agricultural imports increase without a corresponding rise in Indian exports. Sensitive sectors like dairy, agriculture, and wine could face resistance from domestic stakeholders.
2. Regulatory and Non-Tariff Barriers
Differences in standards, labeling requirements, and sanitary and phytosanitary measures could create friction. Streamlining regulatory frameworks will require political consensus and business alignment.
3. Political and Social Sensitivities
Protectionist tendencies within India, particularly in agriculture, could lead to domestic political pushback. Ensuring a balanced deal that benefits both nations without disproportionately impacting vulnerable sectors will be critical.
4. Global Economic Uncertainty
Trade disruptions due to geopolitical tensions, supply chain instability, and inflation could dampen the benefits of the FTA. A global slowdown may reduce the demand for exports and investment.
LESSONS FROM RCEP AND OTHER FTAs
India’s withdrawal from the Regional Comprehensive Economic Partnership (RCEP) underscores the importance of addressing trade deficits and protecting domestic industries. Similarly, India’s approach to the New Zealand FTA will need to balance domestic interests with the strategic imperative of securing deeper market access.
Japan’s experience with RCEP illustrates the value of inclusive institutional balancing—building trade partnerships while protecting core economic sectors.

Strategic Importance in the Indo-Pacific
1. Geopolitical Influence
Strengthening ties with New Zealand aligns with India’s broader Indo-Pacific strategy. New Zealand’s participation in the Indo-Pacific Oceans’ Initiative reinforces regional maritime cooperation.
2. Soft Power and Cultural Exchange
People-to-people ties, including the Indian diaspora in New Zealand, provide a foundation for deeper cultural and economic ties.
Enhanced education and tourism exchanges will foster mutual understanding and cooperation.
3. Countering Chinese Influence
China’s dominance in the Asia-Pacific trade landscape poses strategic risks. Strengthening economic ties with New Zealand enhances India’s bargaining power and reduces dependency on China.

What to expect?
The India-New Zealand FTA isn’t just about trade — it’s about securing long-term strategic alignment and economic resilience. If executed well, this agreement could set the stage for a future where both countries emerge as stronger, more connected players in the global economic order.

Compiled by
Ruchira Talapatra

2025 Trade Triumph? EU Chief Says ‘Agree With PM Modi’ On Finalizing India-EU Free Trade Deal!

February 28, 2025, 12:05 pm

European Commission President Ursula von der Leyen announced in New Delhi on Friday, February 28, that India and the European Union are pushing to conclude negotiations on a groundbreaking free trade agreement (FTA) within the year.

High-Level Delegation in New Delhi

Leading a 27-member delegation to India’s capital, von der Leyen underscored the mutual commitment of both parties. “A free trade agreement between the EU and India would be the largest deal of its kind anywhere in the world,” she remarked, acknowledging that while the process will be challenging, decisive timing and determination are key to its success.

Accelerated Negotiation Efforts

Negotiations, which resumed in June 2022, are being fast-tracked to meet an ambitious deadline. Von der Leyen emphasised that this agreement is not only timely but also critical for boosting bilateral economic ties. “We have agreed with Prime Minister Narendra Modi to push to get it done during this year, and you can count on my full commitment to make sure we can deliver,” she stated confidently.

Strategic Partnership for Global Trade

The proposed FTA is expected to deepen economic collaboration between the EU and India, potentially setting a new standard for international trade agreements. Both sides view the deal as a strategic opportunity to enhance market access, promote investment, and drive sustainable growth in an increasingly interconnected global economy.

As discussions continue, both the EU and India remain focused on overcoming obstacles to finalize this historic deal. The outcome of these negotiations could reshape global trade dynamics, reinforcing the importance of strategic partnerships in today’s rapidly evolving economic landscape.

Von der Leyen’s announcement highlights a significant step forward in EU-India relations. With strong political will and dedicated efforts from both sides, the prospect of finalising one of the world’s largest free trade agreements within this year appears increasingly within reach.

India And Russia Strengthen Ties, Aim For $100 Billion Trade Target Before 2030

November 12, 2024, 10:25 pm

India and Russia recently held the 25th session of the Intergovernmental Commission on Trade, Economic, Scientific, Technical, and Cultural Cooperation in New Delhi. External Affairs Minister S Jaishankar and Russia’s First Deputy Prime Minister Denis Manturov co-chaired the session.

Trade Target of $100 Billion

Jaishankar expressed confidence in surpassing the bilateral trade target of $100 billion well before 2030, citing India’s rapid economic growth and its reliance on Russia for resources and technology.

Enhancing Collaboration: Make in India

Both nations are keen on expanding joint ventures under the Make in India initiative. Jaishankar noted significant progress in addressing trade challenges related to payments and logistics but emphasized the need for further efforts.

Boosting Connectivity Projects

Key connectivity projects like the International North-South Transport Corridor (INSTC) and the Chennai-Vladivostok corridor were highlighted. Both leaders agreed to push forward with these initiatives.

Talent Mobility and Skill Development

Discussions also focused on facilitating talent mobility, with customized skill programs for the Russian market seen as a mutual priority.

Expanding Air Traffic and Nuclear Cooperation

Manturov expressed Russia’s interest in increasing direct flights between the two countries and strengthening cooperation in the nuclear sector, including advancements at the Kudankulam Nuclear Power Plant.

Free Trade Agreement in the Works

The session underscored the importance of a Free Trade Agreement (FTA) between the Eurasian Economic Union (EAEU) and India. Manturov reaffirmed Russia’s commitment to finalizing the FTA to boost trade and investments.

Growing Bilateral Trade

Russia highlighted a remarkable fivefold increase in bilateral trade over the past five years, with India now being its second-largest trading partner globally.

Looking Ahead

The productive discussions aim to further enhance the strategic partnership between the two nations, setting the stage for robust economic growth and collaboration across various sectors.

China And Peru Forge A New Negotiation Upgrading Free Trade Agreement

June 29, 2024, 2:29 pm

China and Peru have reached a significant milestone in their economic partnership, achieving a “substantial conclusion of negotiations” on upgrading their free trade agreement, according to Chinese state media on Friday.

During a meeting in Beijing, Chinese President Xi Jinping and Peruvian President Dina Boluarte discussed enhancing cooperation in key sectors such as minerals, energy, manufacturing, and agriculture, as reported by state broadcaster CCTV.

The original free trade agreement, signed in 2009, has significantly boosted Peruvian exports. Building on this foundation, the leaders signed several new agreements to further strengthen bilateral ties. Among these agreements is a deal on Peruvian grape exports to China and a memorandum of understanding establishing a Peruvian-Chinese Business Council.

China stands as Peru’s top investor and the primary market for its copper, with Peru being the world’s third-largest producer of the red metal. “China’s interest in key sectors of the Peruvian economy, such as mining, infrastructure, and energy, is fundamental to national development plans, while ongoing investments are a source of employment and a promise of progress,” Boluarte stated.

During her visit to China this week, Boluarte met with executives from several companies and extended an invitation to Xi to inaugurate the Chancay “megaport” in November. This major infrastructure project on Peru’s coast is being developed by the Chinese company Cosco Shipping.

Xi is expected to travel to Peru in November for the Asia-Pacific Economic Cooperation (APEC) summit, a significant event that represents nearly half of the world’s trade. The upcoming summit and the upgraded trade agreement underscore the deepening economic ties between China and Peru, promising further growth and cooperation in the future.

India Poised to Finalize FTA with Oman in Modi’s Third Term’s First 100 Days

June 12, 2024, 12:01 pm

India is poised to finalize a free trade agreement (FTA) with Oman within the first 100 days of Prime Minister Narendra Modi’s third term. The Prime Minister emphasized the potential for enhanced strategic ties during a review meeting chaired by Commerce Minister Piyush Goyal.

Negotiations between India and Oman on the FTA were nearing completion during Modi’s previous term. However, the enforcement of the model code of conduct for the Lok Sabha polls halted the process in March. Officials familiar with the matter revealed that the deal is nearing conclusion, pending formal approval from both sides.

Just before the elections, India inked an FTA with four European nations, pledging significant investment in India to generate direct employment opportunities. Officials confirmed the preparation of necessary draft documents for the FTA with Oman, describing it as an ongoing process. Oman’s ruler also congratulated Prime Minister Modi on his third term, emphasizing the enduring strategic relationship between the two nations.

Once finalized, the FTA with Oman will mark a significant bilateral achievement for Modi’s third term and the fourth since 2022. The agreement is expected to bolster India’s energy security, ensure affordable fertilizer supply, and attract foreign investments. Additionally, it will facilitate reduced prices for Indian exports to Oman, encompassing various commodities such as rice, tea, coffee, spices, dairy products, and machinery.

The momentum for FTA discussions heightened following a meeting between bin Tarik and Modi in December 2023. The proposed Comprehensive Economic Partnership Agreement (CEPA) was a focal point during their discussions. Both countries are committed to enhancing trade and investment ties, as evidenced by the decision to establish dedicated desks for investment promotion.

India and Oman share deep-rooted historical and strategic connections, fostering bilateral trade and investment relations since 1955. Recent data from the commerce ministry indicates significant growth in bilateral trade, reaching $12.39 billion in 2022-2023. This upward trajectory underscores the mutually beneficial nature of the partnership.

India Seeking Free Trade Agreement With Island Nation, Says Maldives Minister

May 26, 2024, 12:53 pm

India has initiated efforts to establish a Free Trade Agreement (FTA) with the Maldives, as confirmed by Maldivian Minister of Economic Development and Trade, Mohamed Saeed. Addressing a press conference in Male, Saeed highlighted that discussions regarding the Free Trade Deal are currently underway.

“They (India) want there to be a Free Trade Agreement with the Maldives, in addition to SAFTA (South Asian Free Trade Agreement),” Mohamed Saeed stated, according to news agency PTI. He mentioned that Maldives President Mohamed Muizzu has extended the opportunity for a free trade deal to all countries, aiming to ease trade activities through multiple agreements.

This move to seek a free trade deal comes amid strained diplomatic relations between India and the Maldives. Tensions have been high since November last year, following several Maldivian ministers’ online remarks mocking Indian Prime Minister Narendra Modi’s visit to Lakshadweep. The diplomatic skirmish was further fueled by President Muizzu’s pro-China stance and his directive for Indian troops to leave the Maldives. The last of the Indian military personnel were replaced by civilians earlier this month.

The existing 1981 India-Maldives trade agreement has been instrumental in facilitating the export of essential commodities. Data from the Indian High Commission revealed that bilateral trade between India and the Maldives surpassed $300 million for the first time in 2021 and exceeded $500 million the following year.

Despite the diplomatic discord, India demonstrated goodwill in May by extending vital budgetary support to the Maldivian government. This support included the rollover of a $50 million Treasury Bill for another year at the special request of the Maldivian government. The initiative to forge a Free Trade Deal signifies India’s commitment to strengthening economic ties with the Maldives, notwithstanding recent tensions.

“Delivering a new FTA with India”: Rishi Sunak

November 29, 2022, 12:32 pm

UK Prime Minister Rishi Sunak on Monday delivered his first major address on UK Foreign Policy. He emphasized the importance of a Free Trade Agreement (FTA) with India that aims to strengthen the domestic economy.
This occurs as India and the UK continue their FTA negotiations, which started in January of this year and are intended to advance their trade and investment relations. Currently, both nations actively engage in bilateral trade as part of a multifaceted strategic cooperation.
“By 2050, the Indo-Pacific will deliver over half of global growth…compared with just a quarter from Europe and North America combined. That’s why we’re joining the Trans-Pacific trade deal, the CPTPP, delivering a new FTA with India, and pursuing one with Indonesia,” Sunak said in his address at the Lord Mayor’s Banquet at London’s Guildhall.
Regarding the second-largest economy in the world, Sunak argued that the “golden period” between Britain and China is “now finished” and that it is time to change the country’s policy towards it because its authoritarian government poses a systemic threat to UK values and interests.
Along with outlining his foreign policy views, he attacked China’s violations of human rights.
“Let’s be clear, the so-called ‘golden era’ is over, along with the naive idea that trade would lead to social and political reform. We recognise China poses a systemic challenge to our values and interests, a challenge that grows more acute as it moves towards even greater authoritarianism,” the UK PM said in his address.
Sunak also expressed support for Ukraine in his speech, adding that the UK is standing with the nation that has been devastated by war. He claimed that in order to address issues like security and immigration, Britain is also reviving its ties to the European Union.
The continuous demonstrations against COVID lockdowns in China have the UK Prime Minister worried. Sunak emphasised that the BBC correspondent was recently detained in China and claimed that the Chinese government “had opted to crack down more” as opposed to paying attention to the public’s concerns.

Australian Parliament passes trade deal with India

November 22, 2022, 1:17 pm

Anthony Albanese, Australian Prime Minister on Tuesday announced that country’s Free Trade Agreement (FTA) with India has passed through its parliament.
Albanese tweeted, “Breaking: Our Free Trade Agreement with India has passed through parliament.” This occurs shortly after Albanese announced that he will travel to India in March of the following year. On the eve of the 17th G20 conference, he made this announcement.

He addressed the press on Wednesday and said, “I also met with Prime Minister Modi of India, where we discussed the finalization of the closer economic cooperation agreement between Australia and India, which we regard as being very important for expanding the economic relationship between Australia and India. I will visit India in March.”
He added, “We’ll take a business delegation to India. And that will be an important visit and an upgrade in the relationship that we have between our two nations.”
The trade deal with India gives a significant opportunity for Australian service providers and experts to enter the Indian market, according to Australian Trade Minister Don Farrell last week.
“The quality of this Agreement, in terms of market access and opportunity for Australian businesses, demonstrates India’s commitment to our bilateral economic partnership,” Farrell said.
He further added, “India presents unparalleled growth opportunities for Australian business across a range of sectors, from food and agriculture, technology and green energy, to health and education services.”
The Australia-India Economic Cooperation and Trade Agreement (ECTA) was signed on April 2.
The Australian government claims that the deal will strengthen Australia’s position in the large economy with the highest rate of growth in the world and give Australian companies access to or room to grow in a market with close to 1.5 billion people.

Modi, Sunak agree upon early conclusion of FTA

October 27, 2022, 10:32 pm

Prime Minister Narendra Modi on Thursday spoke with his newly-appointed British counterpart, Rishi Sunak, and the two leaders emphasised the importance of an early conclusion of “a balanced and comprehensive” Free Trade Agreement between the two countries.

The Prime Minister congratulated Rishi Sunak on assuming charge as UK Prime Minister. “Glad to speak to Rishi Sunak today. congratulated him on assuming charge as UK PM. We will work together to further strengthen our Comprehensive Strategic Partnership. We also agreed on the importance of an early conclusion of a comprehensive and balanced FTA, “the Prime Minister said in a tweet.

Rishi Sunak thanked PM Modi for his “kind words” and said he was excited about what the “two great democracies” can achieve as they deepen the bilateral partnership.
“The UK and India share so much. “I’m excited about what our two great democracies can achieve as we deepen our security, defence, and economic partnership in the months and years ahead,” Sunak said in a tweet.

The UK Prime Minister, after Rishi Sunakand was declared the new UK Prime Minister on Monday, said he was looking forward to working closely together on global issues. The Prime Minister also extended Diwali wishes to the “living bridge” of UK Indians.

Sunak had earlier lost the race to become the PM to Liz Truss but the change of fate was triggered by the resignation of Truss following a heavily criticised mini-budget that left the UK pound tumbling.