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Opinion | UK-India Trade Pact: The Empire, Finally, Shakes An Equal Hand

Syed Zubair Ahmed
  • Opinion,
  • Updated:
    Jul 23, 2025 18:50 pm IST
    • Published On Jul 23, 2025 18:48 pm IST
    • Last Updated On Jul 23, 2025 18:50 pm IST
Opinion | UK-India Trade Pact: The Empire, Finally, Shakes An Equal Hand

Seven years is a long time in politics and an even longer time in diplomacy. That's how long it took for Prime Minister Narendra Modi to set foot again in London. The diaspora stadium rallies are in the rear-view mirror now. This time, the mission is quieter, sharper, more strategic. No drum rolls or chants, just the quiet rustle of papers and pens. Because what PM Modi and his British counterpart Keir Starmer are about to do isn't just symbolic, it's historic.

India and the UK have all but sealed the deal on a Free Trade Agreement (FTA) that's been nearly three years in the making. Think of it as a long, awkward courtship now heading for a registry office wedding. The engagement was announced on May 6 in a call between the two prime ministers; since then, legal scrubbing has been underway. What's been settled is no small thing - it's Britain's most ambitious post-Brexit trade agreement to date, and the first FTA India has concluded with a G7 nation. This is the economic handshake of the decade, a partnership between the world's fifth and sixth largest economies, and perhaps, just perhaps, the moment the old colonial script starts to get rewritten by the formerly colonised. The deal may appear not massively impressive outwardly, but its incremental advantages will serve both countries, both in good as well bad times.

Economies Intertwined 

It is, in many ways, a tale of two countries shedding old skins. The UK, freshly single after its EU divorce, is looking around the world for new trading partners. And India, ambitious and increasingly assertive, isn't shy about who it sits across the table from anymore. If the British once extracted value from India, now Indian companies in the UK generate more than 91 billion pounds in revenue and provide over 100,000 jobs. There are close to a thousand Indian firms now operating in Britain, while the UK, for its part, has invested over $36 billion in India. India's outbound investment into the UK stands at $20 billion. These are not crumbs on the table; these are shared meals.

And this isn't just a one-course affair. The bilateral relationship was upgraded to a Comprehensive Strategic Partnership back in 2021. And since then, the two sides have been busy setting the table. There have been two meetings between the leaders in just the past year - most recently at the G7 in June - and now this London visit by Modi, his fourth as Prime Minister, is expected to seal more than just a trade pact. Expect conversations with business leaders, high-level policymakers, and yes, a meeting with King Charles. Call it diplomacy with all the trimmings.

What's In The FTA For India?

But what's actually on the FTA menu? For India, access to the UK market for textiles, seafood, gems and jewellery - sectors that employ millions and shine on global runways. For Britain, it's about selling more Scotch, cars and cosmetics to an India whose middle class is rapidly burgeoning. Indian consumers could soon be sipping Glenfiddich and driving Mini Coopers without paying the kind of taxes that usually make those pleasures feel criminal. It's a win-win, unless you are a domestic carmaker or a local gin distillery. But then again, trade is never without its bruises.

Farm Sector, No-Go Area

Still, India held the line on what matters. There was pressure to open up the agricultural sector - something the Americans have also been pushing hard for. But Delhi didn't blink. The memories of WTO skirmishes, of long fights for food security clauses, of farmers marching through streets with placards and paddy in hand - they still loom large. The Indian farm sector is more than just a GDP figure; it is a social contract. It employs over 40% of the population, and no trade surplus is worth the political or human cost of destabilising it.

The immigration card was played too, and Britain, as always, clutched it close to its chest. India wanted more mobility for its professionals, but London, wary of the optics and politics of migration, offered only a limited visa route for skilled workers: chefs, yoga teachers, maybe a few IT whizzes. Still, there was a significant Indian win - a social security exemption for short-term workers, ensuring they are not taxed twice for the privilege of working abroad. It's not glamorous, but ask any Indian expat and they will tell you: it's gold.

Beyond trade and visas, the relationship is stretching into new terrain. The University of Southampton just opened a campus in Gurugram, the first foreign university to do so under India's new education policy. Other UK varsities are also eyeing the move. In defence and security, there is growing cooperation; in the health sector, the success of the Oxford-AstraZeneca (Covishield) vaccine and the co-development of a malaria vaccine remind us of how scientific collaboration can change lives. The UK is also a major financier of India's renewable energy push - another sign that this is not just about exports and imports, but about how two democracies can co-create the future.

Trump's Shadow On The Deal?

Of course, lurking behind all this is the giant shadow of another suitor: the United States. President Trump - never one to miss a headline - has been promising an "imminent" trade deal with India for months now, claiming that Delhi is ready to open the gates wide for American goods. But behind the scenes, the dance is more discordant. Washington wants full access to India's agriculture, auto components and tariff structures. India is offering a firm handshake - but not a bear hug. At least not as yet.

The stakes are high. Bilateral trade between India and the US reached $190 billion last year. The target, as Modi and Trump once famously set, is $500 billion. But it's easier said than done. Trump's tariff tantrums - 27% on Indian goods announced in April - have been paused, extended and now loom again. Delhi isn't thrilled, and rightly so. You can't build a long-term relationship with a partner who keeps threatening to change the locks.

The Deal With The UK Is A Big Deal

Which is why the UK deal matters so much. It sends a message, not just to Washington, but to Brussels, Tokyo, Canberra and others, that India is ready to play big on the global stage, but only on its terms. FTAs with Australia and the UAE have already been signed. Talks with the EU are ongoing. Canada was in the mix too - until political spats derailed the momentum. India is no longer the shy kid in class, afraid to speak up. It is drafting its own syllabus.

Empire Strikes Deals?

All of this, of course, has a poetic twist. For two centuries, Britain shaped India's trade rules to its own advantage - plundering raw materials, taxing salt, killing local industries in the name of "free markets". Now, as post-Brexit Britain shops around for partners, India has become the prized dance partner. The symbolism writes itself: a once-colonised nation now calibrates terms while the former empire waits for the ink to dry. The empire is striking deals, not back.

And let's not forget the people behind these numbers. The 1.8 million-strong Indian diaspora in the UK forms a living bridge - cultural, economic, emotional. They are doctors, techies, restaurant owners, shopkeepers, journalists. They send remittances home, build businesses there and represent the best of what happens when borders don't block ambition. Every trade deal, every business summit, every new visa scheme touches their lives.

So yes, it may be a short visit, but it is a long game. The handshake between Modi and Starmer is more than just protocol -  it's a recalibration of history, a quiet rebalancing of power, a rewriting of the colonial ledger. The spreadsheets may still need legal scrubbing, the clauses fine-tuned - but the mood is clear: India is not just participating in the global economy. It's helping redesign it.

As the pens are uncapped and signatures laid down, remember this: trade is never just trade. It is identity, ambition, memory, competition, dominance and imagination - folded into fine print. Just ask the founders of the East India Company. 

And in that fine print, a new chapter begins. This time on an equal footing.

(Syed Zubair Ahmed is a London-based senior Indian journalist with three decades of experience with the Western media)

Disclaimer: These are the personal opinions of the author

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