General Studies Paper 2 (International Relations)
Question:- 111. A free-trade agreement between India and UK is desirable for both the nations now. However, there are some roadblocks on the way. Elaborate. Answer in 250 words.
Nov 10, 2022


India and UK are bound by strong ties of history and culture. India has become a major economic power and is a highly valued strategic partner for the UK. A trade deal between the UK and India is a huge opportunity to deepen the already strong trading relationship worth £24.3bn a year, which will benefit businesses and sectors right across both countries.



  1. 1.A Free Trade Agreement between India and the UK is expected to enhance economic growth and prosperity by: increasing import and export flows; increasing investment flows (both outward and inward); enhancing productivity through a more efficient allocation of resources and greater openness to international competition.
  2. 2.The UK , due to severing ties with China would be able to gain access to Indian markets for transport equipment, electrical equipment, medical devices, chemicals, motor vehicles and parts, wines, Scotch, spirits and some fruits and vegetables – which could impact local industry players and/or boost the manufacturing ecosystem.
  3. 3.From India’s perspective, the FTA will allow for an increase in exports of textiles, tobacco, pharmaceuticals, food and beverages, rice and leather. India is also expected to get greater opportunities for Indians to live and work in the UK.



  1. 1.Some issues concerning digital trade and data protection as well as stringent patent rules could be problematic. However, solutions could be found as enough homework has already been done to deal with such issues.
  2. 2.The real challenge will be in the area of migration and mobility. The UK government has many times in the past highlighted the issue of visa overstayers from India. The current political leadership and economic difficulties in the UK may not be very supportive of migration from India as unemployment in UK is expected to rise in coming years.
  3. 3.The two sides are yet to find common ground on many major economic issues. There has been a mini ‘tariff war’ underway between India and the UK. India, in September proposed retaliatory additional duty of 15 per cent on 22 imported items from the UK, including blended whiskey, Scotch, cheese, etc. as a response to restrictions imposed by the UK on 15 Indian steel products, leading to a slump in Indian exports and loss of duty collection worth the US $247.70 million.
  4. 4.India has terminated most of Bilateral Investment Treaties (BITs) including with the UK. To bring British companies under specific protection, the UK would like to add a comprehensive investment chapter. Since the UK is also a major destination of Indian companies for investment, India may not be averse to this, but serious negotiations may take some time.



While the UK needs India’s cooperation to reduce their dependency on China and access bigger markets for their products, India requires such deals to expand their scope of economic power. India is already in talks with several other nations to sign more FTAs, and as such, it is very important for this deal to go through successfully first.