New PM to boost UK-India FTA prospects?

The formal installation on Tuesday of Rishi Sunak as the UK’s new Prime Minister appears to have bolstered the nation’s prospects of sealing a trade deal with India.

Uk and India national flags flying alongside each other

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Prime Minister Narendra Modi sent "warmest congratulations" to Mr Sunak following his election as PM and said India now looked forward to completing Roadmap 2030 - the basis for the current trade deal talks.
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Sealing the deal with India

Government sources in London said completing the deal would be a priority for Mr Sunak, a Hindu whose family roots are in India and whose wife, Akshata Murty, is the daughter of N.R.Narayana Murthy, billionaire founder of the Indian multi-national IT company, Infosys.In his Tweet to Mr Sunak, Mr Modi said: "As you become UK PM, I look forward to working closely together on global issues, and implementing Roadmap 2030."Special Diwali wishes to the 'living bridge' of UK Indians, as we transform our historic ties into a modern partnership."India's Business Today website reported on Tuesday that New Delhi would now like to complete the trade deal "as soon as possible, now that Sunak is prime minister."

Record trade volumes between India and UK

Aside from disagreements over tariffs, access to financial services and visas, Indian ministers were reportedly "furious" earlier this month when then-Home Secretary Suella Braverman - herself of Indian origin - raised objections to a trade deal that would allow more Indian students and business executives into Britain. She was subsequently sacked.However, even without a trade deal, latest figures show that the UK and India are currently exporting and importing record volumes of goods with each other.City AM reported this week that British exports to India in both July and August surpassed £900 million each month for the first time ever, putting the total volume of exports in the first eight months of the year at £5.5 billion, surpassing all preceding full calendar years on record except for the £6.4 billion in 2011."It is not just exports that have been booming – goods imports from India also hit all-time highs in August 2022, reaching £990 million," reported City AM.It meant that imports from India surpassed £900 million for seven consecutive months, an unparalleled record, according to figures compiled by financial services firm Ebury. 

'Huge opportunities'

"India’s growing economy and demographic changes such as a growing middle-class make it likely to become increasingly important over the coming years as the UK widens its trading links post-Brexit,” said Jack Sirett, Partner at Ebury.“A successfully negotiated FTA would put rocket fuel in trading volumes that are already rising rapidly, particularly in sectors such as automotive, agri-food, machinery, and pharmaceutical industries that are keen to export to India by providing further certainty and decreasing tariffs."A spokesman at the Department for International Trade in London said: “India is an economic superpower, projected to be the world’s third largest economy by 2050. Improving access to this dynamic market will provide huge opportunities for UK businesses, building on a trading relationship currently worth more than £24 billion.“That’s why we are negotiating an ambitious Free Trade Agreement that works for both countries. We have already closed the majority of chapters and look forward to the next round of talks shortly.”

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