Post-Covid UK-India Ties See Growth in Exports and Migration

06 Jul, 2024

Post-Covid UK-India Ties See Growth in Exports and Migration

In the recent UK elections, the Labour party, led by Keir Starmer, won the people's mandate, ousting the Conservative party. Starmer pledged to pursue a "new strategic partnership" with India, including a free-trade agreement (FTA). An FTA is expected to provide UK exporters with a significant price advantage in the Indian market. Negotiations, which began in January 2022, have reportedly closed 19 of the 26 proposed chapters. The UK accounted for $9.3 billion of India's exports in the year ending March 2019, increasing to $13 billion by March 2024.

Exports were $1.8 billion more than imports in 2018-19, rising to $4.5 billion in 2023-24. India remains the second-largest source of foreign direct investment (FDI) to the UK after the US, with overseas direct investment from India to the UK reaching $265 million in FY25. India's forex reserves declined by $1.71 billion to $651.99 billion, according to RBI data. India overtook the UK to become the fifth-largest economy in late 2021, with a per capita GDP of $2,484.8 in 2023 compared to the UK's $48,866.6. The CII and the High Commission of India in the UK highlighted Indian states' contributions to FDI in the UK, with Maharashtra leading, followed by Karnataka and Delhi.

Labour has pledged to reduce net migration, with policies aimed at lowering it to a few hundred thousand per year. Indian immigration to the UK rose to 251,000 in 2023 from 72,000 in 2019, with most moving for work rather than study.