LONDON: A free trade agreement (FTA) between India and the UK will increase bilateral trade by 26 per cent per annum, according to a new Commonwealth report.
The 'Brexit: Opportunities for India' briefing paper released this week will come as a further boost for the UK Government's hopes of striking closer trade ties with India as it exits the European Union (EU).
It concludes that Britain's exports to India will increase by 33 per cent annually following a new deal.
"If India and the UK decide to enter an FTA and bring down their tariffs to zero, it is likely to have a greater impact on India than the UK. India's imports from the UK are estimated to increase from USD 5.2 billion to USD 7.8 billion, i.e. almost 50 per cent rise per annum if there was an India- UK FTA post Brexit," the Commonwealth Secretariat report notes.
“A zero tariff regime between India and the UK would lead to some trade diversion from EU countries, when India would prefer importing from the cheaper source," it says in its forecast.
The analysis also highlights that India and the EU have been negotiating an FTA since 2007 without conclusion, which also presents an opportunity.