From colonization to cooperation: Significance of the India-UK free trade agreement

The trade history of India with European Union countries, particularly the United Kingdom (UK), is well established. India has regularly maintained a trade surplus with the UK since the fiscal year 2004–2005, in contrast to its trade relations with the rest of the globe. This study seeks to delve into India's trade potential with the UK, focusing on the HS-2 digit (Harmonized System) over the period 2001–2021. This research employs several trade indices to gather insights into the shared trade potential between two nations. The study's findings explain that India's trade intensity with the UK is comparatively lower when contrasted with its trade patterns with other global partners. The results of the Revealed Comparative Advantage and Trade Potential index indicate numerous sectors where India can seize opportunities to enhance its trade with the UK. In summary, the study emphasizes that although trade between India and the UK has been growing gradually, there is still unrealized potential that may result in greater welfare gains for both countries. This study identified a significant research gap that needs to be investigated. In conclusion, the study makes a strong case for the anticipated economic integration, which is best illustrated by the creation of a Free Trade Agreement between India and the UK, as a promising opportunity for the improvement of both countries. This proposed FTA represents a perfect example of a win‒win situation in which both parties stand to gain significantly and witness a boost in their overall economic well-being.