During a virtual meeting earlier this week, Prime Minister Boris Johnson and his Indian counterpart, Prime Minister Modi, agreed a new Enhanced Trade Partnership which will bring £1 billion worth of new trade between the countries and generate 6,500 jobs.
The agreement follows the UK government’s recent move of donating £6 million worth of medical supplies to help India stave off a devastating second wave of Covid-19. The partnership is also likely to serve as a precursor to a future Free Trade Agreement between both nations by committing both parties to discussions over removing market access barriers.
The developments are part of a wider ambition within Westminster to double the value of UK-India trade by 2030, with India a key trading partner in the Indo-Pacific region which constitutes an area of importance to the UK's security and prosperity.
The agreement will see £533 million invested by India into the UK, which will generate over 6,000 jobs in rapidly growing industries including the health and technology sectors. £200 million within the deal will be set aside to invest into low carbon sectors.
The Serum Institute of India is investing £240 million into its vaccine business in the UK, as well as a new office premises which will create jobs and generate new business worth more than $1 billion, £200 million of which will be invested into the UK.
Serum’s funding will be dedicated to clinical trials, research and development and potentially vaccine manufacturing. The institute has already begun the first phase of trials in the UK for a one-dose nasal Covid-19 vaccine.
British businesses will also benefit from export deals to India worth over £446 million, which will create 400 new UK jobs and bring about opportunities across the food and drink, life sciences and services sectors.
Trade between the UK and India was worth £23 billion annually prior to the new partnership and was responsible for over half a million jobs. A future free trade deal could support many more jobs and help boost the economies of both countries by reducing tariffs on British products exported to India, or by removing them entirely.
Prior to talks with Prime Minister Modi, Johnson had already engaged in dialogue with business leaders from Indian firms Infosys and HCL to discuss the importance of closer economic ties between the nations.
The UK's Integrated Review published earlier in the year also served to re-emphasise the importance of healthy trade between both countries.
Johnson commented: "The UK and India share many fundamental values. The UK is one of the oldest democracies, and India is the world’s largest. We are both committed members of the Commonwealth. And there is a living bridge uniting the people of our countries.
"In the last week the British people have stepped up in their thousands to support our Indian friends during this terrible time in a demonstration of the deep connection between the UK and India. This connection will only grow over the next decade as we do more together to tackle the world’s biggest problems and make life better for our people. The agreements we have made today mark the beginning of a new era in the UK-India relationship.
“Like every aspect of the UK-India relationship, the economic links between our countries make our people stronger and safer. Each and every one of the more than 6,500 jobs we have announced today will help families and communities build back from coronavirus and boost the British and Indian economies.
“In the decade ahead, with the help of the new Partnership signed today and a comprehensive Free Trade Agreement, we will double the value of our trading partnership with India and take the relationship between our two countries to new highs.”