NEWS - How the UK-India Trade Deal Unlocks Aerospace Opportunities

Significant Benefits from UK-India Trade Deal

The recent Free Trade Agreement (FTA) signed between India and the United Kingdom on May 6, 2025, marks a historic milestone in their relationship. This ambitious and comprehensive deal is expected to boost bilateral trade by £25.5 billion annually in the long run and increase UK GDP by £4.8 billion each year. While the deal covers a wide variety of sectors, including clean energy, medical devices, and automotive, it also offers significant opportunities for the aerospace sector.


This article explores the benefits of this trade deal for UK aerospace manufacturers looking to work with Indian companies and why Indian aerospace companies should consider partnering with UK entities to leverage these new opportunities.


Benefits for UK Aerospace Manufacturers Collaborating with Indian Companies Under the Trade Deal


The new UK-India trade deal includes tariff reductions on aerospace products, which can open up significant business opportunities for aerospace companies in both countries. This reduction in import tariffs makes it easier and potentially cheaper for UK firms to export a wide variety of items, including aerospace products, to India.


Beyond just tariff cuts, the deal strengthens cooperation in engineering and technology-intensive sectors. This enhanced collaboration could lead to increased investment and job creation in areas like aerospace manufacturing and defence technology. With India's growing economy and increasing demand for advanced aerospace technology, UK companies may find new opportunities to collaborate on projects, supply components, or even establish joint ventures with Indian partners.


Aligning with India's Atmanirbhar Bharat (self-reliance) policy is highlighted as a key strategy for UK companies seeking success in the Indian market. Contributing to domestic aerospace manufacturing and defence projects directly supports this initiative. India is already recognized as the second most sought-after manufacturing destination globally, making collaboration with Indian firms a strategic move for UK manufacturers.


The sources provide concrete examples of successful UK-India aerospace collaborations that predate or coincide with the deal:


  • Mahindra Aerospace partnered with Rolls-Royce to source M250-B17F/2 turboprop engines for the new GA10 aircraft, demonstrating a strong UK-India aerospace tie-up.
  • Thales UK and Bharat Dynamics Ltd. (BDL) signed a contract for STARStreak high-velocity missiles, enhancing India's defence capabilities. They are also collaborating on next-generation weapons like Laser Beam Riding MANPADs (LBRM) and Lightweight Multirole Missiles (LMM).
  • MBDA UK and BDL are establishing India’s first Advanced Short-Range Air-to-Air Missile (ASRAAM) assembly and test centre in Hyderabad. This facility is expected to boost India's defence capabilities and create jobs.


These partnerships underscore the growing aerospace and defence cooperation between the two nations. Strategies for UK firms to position themselves to take advantage of the deal include leveraging the trade deal itself, collaborating directly with Indian firms, investing in R&D and innovation, expanding Maintenance, Repair, and Overhaul (MRO) services, and engaging with government initiatives like Atmanirbhar Bharat.


Sectors poised to gain include Aircraft Components & Systems, Space Technology & Satellites, Defence & Military Aerospace, Advanced Materials & Engineering, and MRO services. The agreement is expected to boost trade and investment in these areas, making it easier for UK aerospace firms to enter the Indian market.


Why Indian Aerospace Companies Should Seek Partnerships with UK Entities


While the provided sources do not specifically mention the Farnborough Aerospace Consortium (FAC) or its members by name, they strongly highlight the benefits for Indian companies partnering with UK entities in the aerospace sector.


The UK is a key player in advanced engineering and manufacturing, and access to technology across the supply chain is essential for the aerospace sector in India to grow at the desired pace. The trade deal aims to facilitate access to competitive imports that support production at home and promote collaboration on new technologies.


Partnering with UK companies, like those mentioned in successful collaborations, can provide Indian firms with access to advanced aerospace technologies, including:


  • High-velocity missiles (Thales UK & BDL).
  • Advanced Short-Range Air-to-Air Missiles (ASRAAM) assembly and testing capabilities (MBDA UK & BDL).
  • Expertise in aircraft engines (Rolls-Royce).
  • Collaboration on next-generation weapons (UK-India Defence Partnership).
  • Development of Integrated Full Electric Propulsion (IFEP) systems for naval ships (UK & India Statement of Intent).
  • Development of India’s first maritime testing facility (GE Vernova & BHEL).


The trade deal enhances engineering and technology collaboration and creates new opportunities for Indian industries to be added to global supply chains. The Innovation chapter specifically establishes a working group to enhance existing collaboration, research, and development between the UK and India, potentially covering areas like future regulatory approaches and the commercialisation of new technologies. Furthermore, the professional services annex encourages mutual recognition of professional qualifications, which can streamline processes for Indian professionals working with UK counterparts, reducing administration, time, and costs.


By partnering with UK entities, Indian aerospace companies can leverage tariff reductions and streamlined regulations under the trade deal, access local expertise and supply chains through joint ventures, and contribute to India's self-reliance goals by incorporating advanced technologies and manufacturing processes. The presence of other UK companies like BAE, Augusta Westland, and General Dynamics in India also indicates a strong foundation for potential partnerships.


Conclusion


The new UK-India trade deal presents a win-win scenario for the aerospace sectors of both nations. For UK manufacturers, it offers reduced barriers and new avenues for exporting components, systems, and services, alongside opportunities for deeper collaboration and investment within India's rapidly expanding market. For Indian companies, partnering with UK entities provides access to advanced technology, engineering expertise, and strengthens domestic manufacturing capabilities, aligning with national priorities like Atmanirbhar Bharat. These collaborations, built on the framework of the new trade agreement, are set to propel the UK and Indian aerospace industries to new heights, fostering innovation, creating jobs, and boosting bilateral trade.




Matthew Feehan • May 13, 2025

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