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India in the spotlight: Why countries are racing to forge ties with this economic powerhouse

India’s neutral stance over the Ukraine invasion hasn’t deterred the world’s most well-known markets from racing to form lucrative trade ties with the economic powerhouse.

The US remains India’s largest trading partner, with exports of goods from India worth $77 billion. While the US has long been one of the only countries with which India has a trade surplus, the UK and EU are now following in the steps of the global superpower, with hopes to secure a solid trading relationship with the sixth largest economy.

The EU has taken the lead in setting regulations for big tech and climate finance – developing its own strategy for engaging the Indo–Pacific region after a recent agreement of a trade and technology council with India. The announcement of FTA discussions will begin in June; similarly, the UK are attempting to solidify an FTA with the economic powerhouse, with the prime minister’s recent visit securing more than £1 billion in new investments. The visit also helped with generating 11,000 jobs across the UK – building on the 95,000 jobs already supported by Indian investment.

In tandem, Amazon announced on Wednesday that it aims to export locally produced Indian goods worth $20 billion by 2025 – doubling its initial goal of $10 billion. This key announcement is set to enhance the export potential of Indian micro, small and medium enterprises (MSMEs) and provide these businesses with the opportunity to scale into international markets. On top of their current $6.5 billion investment in India, Amazon has clearly recognised the wealth in opportunities that lie within the world’s second largest internet market.

India is also a major player in sectors such as mineral fuels, gems and jewellery, pharmaceuticals, chemicals, textiles, engineering goods and food commodities in the global market. The country is looking to further cement their status as an export powerhouse and one of the fastest-growing economies in the world.

India’s $3 trillion GDP means that the country is on track to becoming the third largest economy in the world by 2050. It is rapidly stretching its might across the world stage – through not only goods, but also their diverse talent pool. With a young and dynamic population of 1.39 billion people, 43% of skilled workers entering the UK last year were Indian nationals, further demonstrating how vital the nation is in terms of curbing the UK’s severe skills shortage.

Nayan Gala, founder of JPIN, comments on how forging ties with India could boost UK employment and economic growth:

“India is one of the world’s largest economies and presents huge potential as a key partner for trade and investment all around the world. India is a 21st century powerhouse, and the significance of a relationship with one of the fastest-growing economies cannot be ignored.

“India is a top priority for good reason – it is goods and resource-wealthy, growing exponentially, and will be the centre of world trade in the coming decades.

“This means two things – firstly, the fact that a vast number of companies still haven’t reached their full potential, means they’ll contribute in an even bigger way to India’s economy in years to come. Secondly, it makes India an attractive destination for external investors with the desire to dip into a market that holds a wealth of options in terms of fast-growing MSMEs that would be receptive to receiving capital and provide high returns.”