UK-India Investment Pact Can Supercharge FDI, Says Former FTA Negotiator

A former UK free trade agreement negotiator has described India as a "huge growth opportunity" and argued that a bilateral investment pact between the UK and India could meaningfully amplify foreign direct investment flows beyond what the newly enacted FTA alone can achieve. The comments, reported by The Times of India, come on the same day the India-UK Free Trade Agreement came into force — placing the investment question at the centre of the next phase of the bilateral economic relationship.

The distinction between a free trade agreement and a bilateral investment treaty is important. While the FTA lowers tariffs and opens service sectors, an investment pact typically provides stronger legal protections for companies investing cross-border — covering protections against expropriation, fair treatment guarantees, and dispute resolution mechanisms. Such frameworks are seen as critical confidence-builders for large-scale, long-term capital commitments in manufacturing, infrastructure, and technology.

India has been cautious in recent years about bilateral investment treaties following its decision to exit several in the mid-2010s, but the momentum of the UK-India economic relationship appears to be creating fresh appetite for revisiting the question. The UK, which is actively building its post-Brexit trade architecture, has strong incentives to deepen investment ties with one of the world's fastest-growing major economies.

For India, the prospect of enhanced FDI from the UK — a major source of investment in Indian financial services, retail, and technology — is strategically significant. Analysts will watch whether the governments formally commence investment treaty negotiations in the coming months as a natural complement to the FTA now in effect.