Why the India-UK trade deal will be a boost for marketers
As UK prime minister Rishi Sunak arrives in India, editor-in-chief Gordon Young says the prospect of a trade deal between the two nations should be a welcome one for marketers.
/ Photo by Naveed Ahmed on Unsplash
What is the world’s fastest-growing tech hub? Austin? Miami? Berlin? No, it’s Bangalore – home to companies such as Infosys. In the first half of 2022 alone, Bangalore’s start-ups attracted $7.5bn of venture capital and many expect it to surpass Silicon Valley over the next few years.
Why is this relevant? A hot topic at the current meeting of the G20 in Delhi will be the potential of a free trade agreement between the UK and India.
If the deal goes ahead it will not only be a massive boon to the digerati of Bangalore, but to the UK tech scene as well. It will provide a powerful link between the world’s fifth and sixth largest economies: India and the UK respectively.
Kevin McCole, managing director of the UK India Business Council, told Nikkei that a free trade agreement would bring “real growth” in digital trade because of respective strengths in the sector and the geographical distance between the countries.
“Data and digital trade only have to navigate regulatory barriers,” he said. “So if regulatory alignment is agreed, then there is scope for substantial growth in UK-India trade via digital services and digitally enabled services."
However, to liberalize digital trade any deal would have to see both sides agree to drop custom duties on electronic transmissions, not adopt unjustified data localization measures and agree on common protocols around e-signatures and data generally.
Since similar arrangements exist between Japan and the UK, this is not beyond the bounds of possibility. But this being India, there are some political complications like a new domestic data protection law going through its parliament which could cause trouble in terms of localization. However, most seem optimistic that these issues are not insurmountable.
The benefits to both countries would be huge. With barriers removed the deal could open up one of the world’s fastest and most populous countries to the UK tech and marketing industry.
And of course, the boost to India will allow it to accelerate growth, and ultimately position it as an economic powerhouse to rival China.
Said the UK government in a paper explaining their rationale for backing the deal: “A free trade deal between the two countries makes sense because both nations are large exporters and importers of goods and services. Through the FTA, the UK intends to acquire a broader reach to the Indian market for its export items and given India is the third-largest services exporter to the UK, a trade agreement will broaden access for India to the UK. An FTA would be a win-win for both countries.”
But of course, it is not just digital and tech will benefit. Many brands and marketing agencies are already gearing up to take advantage should the deal be agreed.
For example, the likes of Lush and John Smedley have already taken part in a beauty and fashion trade mission to India. Other big beneficiaries will be the UK car and whisky industry which should see tariffs cut.
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Adding to the mood of music is the close cultural ties between the two countries; similar legal systems, democracy and a common language – in fact there are three times as many English speakers in India as in the UK. Of course, Indians are well established in the UK itself, they are one of the largest ethnic groups, and an extra 1,500 Indian workers are arriving in the UK each week.
The timing of any deal is not clear – many believe if it does not happen soon, we may have to wait until after the upcoming elections in each country.
And even if it is signed, it is unlikely to make much difference in the short term. But there is no doubt going forward the opportunities will be significant and those in digital and brand marketing stand to be among the big winners.