The ongoing negotiations between the United Kingdom (UK) and India aimed at establishing a comprehensive Free Trade Agreement (FTA) have gained significant traction, with both sides demonstrating a strategic interest in enhancing bilateral trade and economic cooperation.
The latest round of discussions saw a high-profile UK delegation visiting India, including UK Business and Trade Secretary Jonathan Reynolds and UK Investment Minister Poppy Gustafsson.
The visit signifies the UK’s commitment to expanding its trade relationships in the post-Brexit era, particularly with rapidly growing economies such as India.
Economic relevance
The UK-India FTA is anticipated to be a transformative deal for the air cargo industry, with implications extending across sectors that heavily rely on airfreight, including pharmaceuticals, engineering goods, textiles, electronics, and agricultural products. According to the UK Department for International Trade (DIT), India is the UK’s 12th largest trading partner, with bilateral trade valued at approximately US$38.3 billion in 2024, representing a 9.4 percent year-on-year increase.
If successfully implemented, the FTA could further elevate this figure by eliminating trade barriers, reducing tariffs, and enhancing market access. Industry analysts highlight that India’s air cargo throughput is projected to increase from approximately 3.5 million metric tonnes in 2024 to 10 million metric tonnes by 2030. Enhanced connectivity with the UK through a streamlined FTA could significantly boost cargo traffic, promoting supply chain efficiency and reducing transit times for high-value shipments.
Comparative analysis
The UK’s efforts to enhance trade relations are not confined to India. The Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which the UK has been actively negotiating to join, involves key Southeast Asian economies such as Singapore, Malaysia, and Vietnam. The trade agreements established with these nations have demonstrated positive outcomes for air cargo operations. Singapore’s airfreight exports to the UK grew by approximately 7 percent within the first year of its bilateral FTA, while Vietnam’s trade volumes with the UK have risen by an average of 10 percent annually since the signing of their agreement. These case studies illustrate the potential benefits of harmonised trade frameworks and provide a comparative benchmark for the UK-India FTA negotiations.
Developments and implications
For the UK-India FTA to realise its full potential, significant attention must be paid to infrastructure investment, regulatory alignment, and customs digitalisation. Although major Indian airports such as Delhi, Mumbai, and Bengaluru have been actively expanding their cargo-handling capacities, regional airports remain largely underutilised. The proposed FTA could serve as a catalyst for enhancing air cargo infrastructure by promoting public-private partnerships (PPPs) and fostering investment in dedicated freight corridors.
Improved air cargo traffic between India and the UK could encourage stakeholders to expand freighter fleets and enhance multimodal logistics networks, ensuring a smoother flow of goods. Additionally, integrating sustainable aviation fuel (SAF) incentives and carbon reduction targets within the FTA could align trade objectives with broader UK and EU climate policies, ensuring compliance with stringent environmental standards.
Developments and implications
Despite the potential benefits, several challenges remain. Industry experts have raised concerns about divergent regulatory standards, inefficient customs processes, and inconsistent freight policies. These issues could undermine the intended benefits of the agreement if not adequately addressed.
Prominent industry leaders have suggested that policymakers focus on regulatory coherence, the digitalisation of customs processes, and the establishment of mutual recognition agreements (MRAs) for air cargo security and certification.
Commenting on the negotiations, Jonathan Reynolds stated, “For the UK-India FTA to succeed, it must be designed with the realities of modern supply chains in mind. Air cargo connectivity will be a critical component in ensuring the agreement’s effectiveness.”
