Prime Minister Narendra Modi is on a two-day visit to the United Kingdom, during which India formalised a landmark Free Trade Agreement (FTA) set to boost annual bilateral trade by nearly USD 34 billion. The deal promises easier market access for both countries, with 99 per cent of Indian exports gaining tariff benefits and British products like whisky, cars, medical devices, and cosmetics becoming affordable in India.
In a joint statement after signing the Free Trade Agreement, PM Modi said the deal was more than just an economic partnership. He said, “It is also a blueprint for shared prosperity.”
UK PM Keir Starmer said, “A landmark deal with India means jobs, investment and growth here in the UK. It creates thousands of British jobs, unlocks new opportunities for businesses and puts money in the pockets of working people.”
KEY POINTS FROM THE FREE TRADE AGREEMENT
The FTA is expected to boost key sectors such as textiles, leather, footwear, sports goods and toys, marine products, gems and jewelery, engineering goods, auto parts and engines, and organic chemicals.
The free trade deal benefits British whisky producers as tariffs are slashed in half, reduced immediately from 150 per cent to 75 per cent and then dropped even further to 40 per cent over the next ten years.
Automobile tariff to fall from 100 per cent-plus to 10 per cent under quota, making British automobile – auto manufacturer Aston Martin and Tata-owned Jaguar Land Rover – cheaper in India.
Duty-free access under the FTA is expected to boost India’s electronics exports – including smartphones, optical fiber cables, and inverters – while also giving a push to software services growth.
Indian spices like turmeric, pepper, cardamom; processed goods like mango pulp, pickles, and pulses; and marine products such as shrimp and tuna will enjoy duty-free access in the UK market after the signing of the FTA.
An official said, “Feni from Goa, artisanal wines from Nashik, and toddy from Kerala will now enjoy Geographical Indication (GI) protection and shelf space in high-end UK retail and hospitality chains.”
The Free Trade deal will exempt at least 75,000 Indians working in the UK from social security payments for three years.
Union Minister Piyush Goyal, who accompanied PM Modi to sign the landmark FTA with the UK, said India’s talent in IT, services and education will gain from easier access to the UK’s high-value markets with the two sides signing the deal.
The deal allows temporary stay of Indian business visitors and contractual service providers, yoga instructors, chefs and musicians.
Items such as dairy, apples, and edible oils excluded from tariff cuts.