Prime Minister Narendra Modi announced on Tuesday that India and the United Kingdom had finalised an “ambitious and mutually beneficial” free trade agreement which will bolster business and investment between the two countries.
In a post on X, Modi said, “Delighted to speak with my friend PM @Keir_Starmer. In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention.”
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Trade between India and the United Kingdom totalled 42.6 billion pounds in 2024, making it Britain’s 11th largest trading partner.
The deal is expected to increase bilateral trade by £25.5 billion, UK GDP by £4.8 billion and wages by £2.2 billion each year in the long run, according to a release shared on gov.uk.
Here are some key facts about what the deal contains:
– Britain said the deal was the “biggest and most economically significant” bilateral trade agreement it had signed since leaving the European Union in 2020.
– 99 per cent of Indian exports will benefit from zero duties according to a press release from the British government
– As per the agreement, India will cut down tariffs on a number of British products sold in the country such as whisky, medical devices, machinery and lamb.
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– Whisky and gin duties will be halved from 150 per cent to 75 per cent, and will decrease to 40 per cent by the tenth year of the deal. This will make the alcoholic beverage cheaper for one the world’s largest whisky markets.
– India will also reduce automotive tariffs to 10 per cent under a quota from over 100 per cent currently.
– Cosmetics, aerospace, salmon, soft drinks, chocolates and biscuits will also face lower tariffs from India. More details about the deal are yet to emerge, however UK Prime Minister Keir Starmer stated that the move will motivate job creation and innovation in the economies of both countries.
– The agreement will ease mobility for professionals including contractual service suppliers; business visitors; investors; intra-corporate transferees; partners and dependent children of intra-corporate transferees with right to work; and independent professionals like yoga instructors, musicians and chefs, as well.
– The deal also envisions a significant boost to trade in services, such as IT, financial services, professional and educational services.
– Indian employees working in the UK will particularly benefit from a three-year exemption from social security payments.
– The India-UK FTA will also open up export opportunities for labour-intensive sectors such as textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery, engineering goods, auto parts and engines, and organic chemicals.
