The UK-India trade deal came into force this week carrying an award of £4.8bn a year. But for Sukhpal Ahluwalia, the entrepreneur who built Euro Car Parts from a single Wembley store into a business he sold for £280m, the deal itself is not a success. Success is what British businesses are now building on.
The Comprehensive Economic and Trade Agreement, which was signed last July, entered into force on July 15 after years of stalling negotiations. It is one of the most important trade deals India has ever signed and the biggest with the UK since Brexit, predicted by the government to add £4.8bn a year to UK GDP and £25.5bn to bilateral trade annually over time.
Ahluwalia, now the chairman of GSF Car Parts and goods group Dominus, has spent decades building businesses in both markets. His conclusion is not straightforward: it is businesses, not deals, that create long-term growth. However, the financial flows, joint ventures and institutional links that two economies of this type should have are still not available in any way they could be.
Too often, he says, UK-India relations have been viewed mainly through a trade lens. The biggest opportunity lies in creating a real two-way exchange of investment, talent and innovation.
For small companies, the gap between opportunity and take-up is palpable. Just 17 percent of UK small businesses currently export, and of that only 12 percent sell to India, a deficit that initiatives such as Great British Pitch India, which put more than 40 export-ready firms in front of Indian buyers last month, are designed to close.
And the hard work is not over at Westminster. MPs on the Business and Trade Committee have already warned that billions in tax savings could be put at risk by plans to cut around 40 per cent of the trade workforce tasked with helping businesses expand in India. Initial cost savings for UK exporters are estimated at £400m a year, rising to £3.2bn a year over a decade, but only if firms are supported to navigate India’s administrative complexities.
The timing, Ahluwalia believes, could not be better. As the UK prepares for a new Prime Minister, the incoming government is fast approaching and has the opportunity to put the UK-India relationship at the center of its growth agenda from day one, rather than letting the relationship slide down the list of priorities.
There is precedent for treating an agreement as a beginning rather than an end. Advisers noted during the talks that external pressures have helped focus minds on completing long-delayed post-Brexit deals, and the same urgency now needs to be applied.
Ahluwalia’s core lesson from decades of moving between the two markets is simple. People, not policy, make growth possible. Governments can create frameworks, but it is businesses, trust and long-term partnerships that turn trade deals into lasting economic growth.
The deal is done. The biggest win is yet to come, and it won’t be signed at the event. It will be created, dealing with agreements and cooperation, by businesses willing to do the work.
