of certain risks that may be faced by British businesses as a result. According to the Resolution Foundation, an agreement between London and New Delhi may provide the European nation with a “first-mover” advantage India. However, it wanted that this would also mean that business services firms, which is one of Britain’s strongest sectors, are at risk of being undercut by lower-cost Indian rivals. The think-tank compared it to US manufacturing being hollowed out by Chinese competition.
Sophie Hale, principal economist at the Resolution Foundation, is of the view that as the UK is seeking to become a member of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which includes Canada, Australia, Japan and Singapore, it is necessary to not lose seight of the risks involved. “While much of the focus has concentrated on becoming the first European country to join the huge CPTPP region, the far bigger potential economic gains and risks lie in more trade with the huge, rapidly growing, but still relatively closed Indian economy,” she said. “Trade liberalisation with India is expected to boost UK manufacturing in the short term, but could also benefit business services, where UK firms already enjoy a competitive advantage, and where demand is set to soar.”
Hale added that demand from the Indian market is increasing, particularly for sectors where UK performs well, such as business, telecommunications and computer services, for which demand is expected to treble over the course of the 2020s. “But India is changing as well as growing, so any trade deal means accepting uncertainty about the competition that will face UK firms, as the price for access to a fast-expanding market,” she said.
