India and Britain Sign Landmark Free Trade Agreement

London, July 24 (TNA) India and the United Kingdom have signed a landmark Free Trade Agreement (FTA) in London on Thursday, marking a new chapter in bilateral relations and economic cooperation. The pact, inked in presence of Indian Prime Minister Narendra Modi and UK Prime Minister Keir Starmer, is hailed as one of the most comprehensive trade deals for both nations since Brexit.

Key Features of the India-UK FTA

• Tariff Reductions:

• India will cut tariffs on 90% of UK products, reducing average duties on British goods from 15% to 3%.

• The UK will eliminate duties on 99% of Indian exports, granting Indian goods broad and unprecedented access to the British market.

• Notably, tariffs on Scotch whisky and gin are to be halved instantly, falling from 150% to 75%, and further reduced to 40% over the next decade.

• Boost to Bilateral Trade:

• The deal aims to increase annual trade by $34 billion and targets $120 billion in bilateral trade by 2030.

• New opportunities are projected for sectors such as textiles, pharmaceuticals, leather, engineering, software, food processing, and fisheries.

Economic Impact and Opportunities

• For India:

• 99% of exports, including textiles, generic pharmaceuticals, agricultural produce, and chemicals, will enter the UK duty-free.

• Indian farmers and fisheries will benefit from expanded market access and higher margins, especially with duty-free entry for key products like spices, processed foods, and marine items.

• Labour-intensive sectors—such as leather, gems and jewellery, garments, and engineering—are poised for significant growth and job creation.

• For the UK:

• British companies will gain easier access to the Indian market for cars, medical devices, soft drinks, cosmetics, and aerospace products.

• The agreement includes a reduction of automotive tariffs from over 100% to 10% under a quota system.

• UK officials expect the deal to boost British exports to India by 60% and create over 2,200 new jobs domestically.

• Consumers in both countries are set to benefit from lower prices and greater product variety, especially in food, drink, and consumer goods.

Safeguards and Additional Benefits

• Sensitive Indian sectors, such as dairy, apples, oats, and edible oils, have been excluded from tariff concessions to protect domestic producers.

• There are provisions for equal treatment of financial firms and a dedicated roadmap for future cooperation in technology, defence, and sustainable development.

Political and Global Significance

The FTA is considered one of the most significant trade deals for India in over a decade and the UK’s biggest bilateral agreement since leaving the European Union. Both leaders described the signing as a “win-win” that will drive growth, create jobs, and deepen economic, technological, and strategic collaboration.

Next Steps

The agreement, while signed, will come into force after receiving legal clearances from the Indian Cabinet and the British Parliament, a process expected to be completed within the year.

This monumental trade pact is expected to redefine the future of India-UK economic ties, bringing widespread benefits to industries and consumers on both sides.