India beckons UK and France after Europe’s election earthquakes

Voters’ economic frustrations caused huge electoral upsets in Europe, opening new avenues for Britain and France to deepen ties with Asia

Reading Time:8 minutes

Both the UK and EU are clamouring for a trade deal with India, which is en route to becoming the world’s third-largest economy. Image: Huy Truong

Published: 9:00am, 13 Jul 2024Updated: 10:11am, 14 Jul 2024

Seismic election upheavals in Britain and France have redrawn the political landscape of Europe, and the ripple effects could reshape trade dynamics with Asian growth engines like India and Southeast Asia in the months ahead.

Voters’ economic anxieties propelled the UK’s Labour Party to a landslide win, toppling the Conservatives after 14 years in power. Across the English Channel, the left-wing New Popular Front coalition secured the most seats in France’s hung parliament.

For Britain’s new Prime Minister Keir Starmer, resetting ties with the European Union will top his agenda. But his “pragmatic” government will also be keen to engage with Asia’s emerging, surging economies, analysts say.

“They see Asian tiger economies and political systems as being in a state of transition,” said British political and security analyst Christopher Blackburn. “These countries already have good regional infrastructure. But Europe can help with boosting and accelerating wealth, development, and human potential.”

The cost-of-living crisis that has gripped Britain and much of Europe was a key driver behind the electoral upsets. Inflation has outpaced household incomes, sparking a squeeze on living standards – partly driven by supply disruptions in the wake of Russia’s war with Ukraine.

People gather in the Place de la Republique in Paris on July 8 to celebrate the victory of the New Popular Front over the extreme right in France’s election. Photo: Le Pictorium via Zuma Press/dpa

France’s New Popular Front campaigned on a platform of economic largesse, pledging to raise the minimum wage, cap prices on essentials and scrap an unpopular pension reform that raised the French retirement age.