The Season Of FTAs  With Switzerland and Britain Done Will Likely Take India GDP To 8 Percent

The advantages of becoming the world’s third largest major economy by 2028 are many. It has been stated and oft repeated by India. But this time the British prime minister himself, heading up the 6^th largest economy now, said it, during his visit just concluded. These advantages are likely to manifest thick and fast as more and more countries make a bee-line for the most populous country on earth.

India, with a 70 crore strong consuming middle class alone, compared to a total population of 7 crores in Britain and 25 crores in America, is the fastest growing major economy in the world. It has a roaring domestic economy and huge consumption statistics. It is building infrastructure to modernise at a frenetic pace.

India’s own ambition of becoming a developed country by 2047, calls for a quickening of the GDP rate from the present 6.5% to 8% and more. Greater trade and cooperation with the international community may well provide the necessary fillip.

The trade agreement with Switzerland and three other small countries not in the EU, namely the EFTA- Switzerland, Norway, Iceland and Liechtenstein, just became effective in October 2025, and promises to pour in an investment of $ 100 billion over 15 years. It took decades to finalise this agreement, but now India’s time has come.

 The EU-India FTA is also nearing completion, as is the Indo-US interim trade agreement, despite knotty issues in the negotiations mainly related to agricultural items. The fact that India follows strategic autonomy in its foreign policy and its national interest in trade negotiations rankles the West, long used to enforcing unequal treaties when dealing with a poor and pliant India. But under the present Modi government, there is little choice but to respect its stance.

The Indo-UK FTA, also in the works for a long time was finalised in July 2025 and was signed recently when Prime Minister Modi visited the UK. The follow-up visit by British Prime Minister Keir Starmer over two days, along with a 125 strong entourage, resulted in at least three substantial announcements.

There will be nine British university India campuses opened shortly. Letters of intent were received during the visit from Lancaster University for a campus in Bengaluru, and an in-principle approval for a campus of the University of Surrey in GIFT City, Gujarat. Many others will follow with Prime Minister Starmer saying all the British universities will come. This will provide access to quality British higher education at a greatly reduced overall cost to the Indian students and their families. Will the American universities and those from Singapore and Australia follow suit?

India signed an agreement to buy over Rs4,000 crores worth (350 million pounds sterling), of Lightweight Multirole Missiles (LMM) manufactured by Thales of UK. In addition, India and Britain intend to finalise a government-to -government agreement to cooperate on developing maritime electric propulsion systems for Indian naval platforms. This will be worth an estimated 250 million pounds in the first phase alone.

There was an agreement for training of IAF flying instructors with the RAF. There will be joint research and development in AI and critical minerals. Efforts are on to revitalise existing joint trade bodies and CEO forums afresh.

Prime Minister Narendra Modi expects trade and cooperation with Britain to double in five years or sooner, to over $100 billion from the current $ 56 billion. With the UK growing at 1% or less, this FTA is extremely important for it and represents the first major agreement after Britain left the EU in Brexit.

Other items discussed include intelligence sharing, negative media in Britain, Khalistani activists, vociferous Islamists who favour Pakistan, fugitives from the law in India residing in Britain, economic offenders, but it is difficult to assess if Britain is politically able to do very much to curb their activities, or to repatriate any of them. Likewise Prime Minister Starmer is holding firm on not letting in more Indians into Britain, or loosening stringent visa conditions.

Britain is closely allied to America, and will need to harmonise its changing policies to a great extent with the US, and this could affect security cooperation including technology transfers between India and Britain despite the FTA.  However, because France, a NATO member like itself, and a leading force in the EU along with Germany, that is also cooperating in defence with India, these rival competitors will persuade Britain to try and  stay in the fray as much as possible.

America’s overall waning influence in an increasingly multipolar world is another reason to reorient policies that are=out-of-date including those in the UN and UNSC. The conversations on these matters is cordial but it is likely that the UNSC permanent members with the veto, and the G7, despite a push from BRICS, will not budge from long held positions, for as long as it can.

India, on its own, a major player in the G20 and BRICS, and increasingly in the SCO and ASEAN, plus a leader of the Global South, cannot be easily pushed aside, and both Europe and America are coming to terms with this. They’ve had to do so for long with China, and now India too won’t be denied. That India is inching towards better relations with China is also not lost on them.

India’s warm relationship with Russia including the purchase of large amounts of crude oil and armaments from it, despite Britain’s hawkish stance on Ukraine, has not been allowed to get in the way.

The dramatic cut in duties both ways in the Indo-UK FTA will facilitate Indian exports of most materials under 50% tariff from the US such as textiles, gems and jewellery, leather goods, agricultural produce, sea-food, and likewise lead to imports of multiple British goods including Scotch at much lower prices.

However, in all the FTAs under negotiation, there are some red lines drawn by both sides, but the attempt is to agree on as much as possible for the sake of greater trade and industry. This is the realistic situation in today’s world as the old order with a dominant West gradually gives way to a multipolar world led by China and India.

(1,027 words)

October 10^th, 2025

For: Firstpost/News18.com

Gautam Mukherjee