As the UK and India prepare for their 13th Economic and Financial Dialogue (EFD) on April 9, Barclays is urging both countries to enhance their economic ties. This appeal comes at a vital time as the global economic landscape is rapidly evolving. The UK and India, ranking as the world’s fifth and sixth largest economies, have been encouraged to demonstrate the lasting benefits of bilateral economic collaboration.
The report titled ‘Batting for Growth: The UK-India Economic Corridor’ published by Barclays, suggests that there are several avenues for further expansion of the UK-India partnership. It outlines four critical areas for development: trade, investment, payment processes, and government mechanisms.
Trade between the two countries has seen significant growth, with the UK-India services trade doubling from £12 billion in 2021 to over £24 billion in 2024. The research indicates a strong preference among Indian consumers for UK goods, with an average premium willingness of 11.8%. Despite this, only a small proportion, 7.3%, of UK exporters engage with India.
Investment is another focal point for improvement. India has emerged as the UK’s fastest-growing investment partner in the past decade. Conversely, Indian investment into the UK ranks as the second most profitable among major inward investors. However, the report highlights the need to bolster two-way investment flows.
The report also identifies challenges in the payments sector, with a noted 18% increase in payments across this corridor between 2023 and 2024. Despite this progress, barriers remain due to compliance and other logistical issues.
On government cooperation, the report criticizes the irregular convening of UK-India forums designed to promote economic partnership. It suggests several policy actions, including finalizing a UK-India Free Trade Agreement (FTA) and a new Bilateral Investment Treaty (BIT), to facilitate smoother trade and investment.
Barclays stresses the importance of digitalization and electronic trade, alongside fostering real-time payments compatible with India’s Unified Payments Interface (UPI). It also emphasizes ensuring consistent application of existing cooperative mechanisms.
C.S. Venkatakrishnan, Group Chief Executive of Barclays, stated: “The UK has a deep and long-standing economic relationship with India. This year’s UK-India Economic and Financial Dialogue marks a new phase of the important partnership between our two countries."
Barclays, with over 29,000 employees in India, supports enhancements in these areas to strengthen trade and investment connections, highlighting the significance of economic cooperation in fostering growth and widening relations.