Historic Agreement Sealed: India-UK FTA Promises Cheaper Imports & New Opportunities
India and the United Kingdom (UK) have signed a free trade deal . This deal, called a Free Trade Agreement (FTA), means that it will be easier and cheaper to buy things from the UK in India.
India and the United Kingdom (UK) have signed a free trade deal . This deal, called a Free Trade Agreement (FTA), means that it will be easier and cheaper to buy things from the UK in India. This is great news for shoppers, especially those who like British items!
For Indian businesses, India-UK FTA means a huge boost. Products like engineering goods, chemicals, and medicines made in India will now get into the UK without any extra taxes. This “zero-duty access” will make it much easier for Indian companies to sell more to the UK, helping our industries grow and create more jobs.And for the Indian consumer? Get ready for some savings! The deal means that popular UK imports, especially Scotch whisky, should become cheaper. Also, expect to see electric vehicles from the UK at more affordable prices.
Both countries are aiming high: they want to increase their annual trade by a massive £25.5 billion (about US$34.5 billion). Looking further ahead, they’ve committed to doubling their current trade to an impressive US$120 billion by 2030, with projections suggesting an additional US$40 billion by 2040. This historic deal sets a clear path for significant economic growth and deeper ties between India and the UK for decades to come.
key advantages for India from India-UK FTA
Boosting India’s Exports and Jobs:
A cornerstone of india-UK FTA is the nearly 99% duty-free access granted to Indian goods entering the UK market. This “game-changer” makes Indian products immediately more competitive. Key sectors, crucial for job creation, stand to gain immensely:
Textiles, Leather, and Gems & Jewellery: These labor-intensive industries, previously facing high tariffs, will now enjoy zero duties, significantly enhancing their market share and doubling exports in some areas within years.
Marine Products: With duties up to 20% removed, India’s seafood exports, including shrimp and tuna, are poised for rapid growth.
Engineering, Chemicals, and Pharmaceuticals: Reduced or eliminated tariffs will boost India’s presence in these critical sectors.
Processed Foods & Agriculture: Over 95% of India’s agricultural and processed food items, from spices to mango pulp, will enter the UK duty-free, projecting over 20% growth in agricultural exports within three years.
Cheaper Imports for Indian Consumers:
While export growth is primary, Indian consumers will also benefit from more affordable UK imports:
Scotch Whisky: Import duties will see a significant, phased reduction, making it more accessible.
High-End Cars: Tariffs on luxury UK-made vehicles will drop, making them more affordable under a quota system.
British Delicacies: Chocolates, biscuits, and soft drinks from the UK will also see tariff reductions.
Enhanced Professional Mobility and Services Growth:
The FTA streamlines pathways for Indian professionals to work in the UK, a major advantage for India’s service sector. Crucially, the Double Contribution Convention (DCC) will exempt Indian workers from UK social security contributions for up to three years, cutting costs and boosting take-home pay. This directly benefits India’s thriving IT, financial, and educational service sectors.
Increased Investment and Strategic Partnership:
The agreement is expected to attract more foreign investment into India, directly leading to new job creation as export-oriented industries expand. Beyond economics, this FTA solidifies India’s role as a key player in global trade, diversifying its partnerships and committing both nations to ambitious long-term trade targets.
In essence, the India-UK FTA acts as a powerful catalyst for India’s economic ascent, opening up unprecedented market access, making certain foreign goods more affordable, and fostering deeper collaboration in professional services.
Union Minister for Commerce and Industry, Mr. Piyush Goyal credited PM Modi’s “visionary leadership” and “resolute commitment” as the driving forces behind the successful completion of this landmark trade agreement with the United Kingdom.
“This CETA marks a milestone in the trade relations between two major economies, setting an ambitious and balanced framework. It unlocks tariff-free access on 99% of Indian exports to the UK, covering nearly 100% of trade value- including labour-intensive sectors advancing the ‘Make in India’ initiative and setting the stage for bilateral trade to double by 2030. It includes ambitious commitments in goods and services, covering various sectors, while enhancing mobility for Indian professionals by simplifying access for contractual service providers, business visitors, and independent professionals. The innovative Double Contribution Convention will exempt Indian workers and their employers from UK social security contributions for three years, boosting competitiveness and earnings. This FTA will serve as a catalyst for inclusive growth, benefiting farmers, artisans, workers, MSMEs, startups, and innovators while safeguarding India’s core interests and accelerating our journey towards becoming a global economic powerhouse.”
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