New Delhi: Reserve Bank of India (RBI) Governor Sanjay Malhotra has welcomed the recently signed India-UK Free Trade Agreement (FTA), stating that the pact will benefit multiple sectors of the Indian economy, including manufacturing and services. Speaking at the FE Modern BFSI Summit, Malhotra emphasized the importance of bilateral trade agreements in the current global trade environment.
“Multilateralism Has Taken a Back Seat”: Malhotra
Malhotra highlighted the waning influence of multilateral platforms like the WTO in shaping global trade and called bilateral FTAs the “way forward.”
“Multilateralism, unfortunately, seems to have taken a back seat. In this context, FTAs like the one signed with the UK are necessary,” he said.
He added that the UK FTA, signed during Prime Minister Narendra Modi’s two-day visit to London, will unlock new opportunities for Indian goods and services in the British market and vice versa.
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Advanced Talks with the United States
The Governor also revealed that India is in advanced stages of negotiations with the United States for a similar free trade agreement.
“We need more such pacts. Negotiations with the US are progressing well, and there are several more in the pipeline,” he noted.
Sectoral Gains Expected
Malhotra said the India-UK FTA will boost:
- Manufacturing exports by providing tariff concessions
- Services sector, especially IT, legal, and financial services
- Investment flows between the two countries
- Job creation through enhanced market access
- Support for Fed Chairman Jerome Powell
In a notable remark about international central banking, Malhotra also expressed support for US Federal Reserve Chairman Jerome Powell, who has faced political heat in the United States.
“He is doing a very good job. Maintaining the independence of central banks is crucial, and I think he has done a commendable job,” said Malhotra, referring to tensions between Powell and US President Donald Trump over rate policy.
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Background on the UK-India FTA
The India-UK Free Trade Agreement was signed in London after prolonged negotiations spanning multiple rounds. It aims to enhance bilateral trade in goods and services, cut tariffs, and streamline regulatory cooperation across sectors.
This FTA is expected to add billions to the GDP of both countries and marks one of the most significant trade deals signed by India in recent years.
