India-UK Ink Historic Free Trade Agreement: In a historic move, India and the United Kingdom have signed a landmark Free Trade Agreement (FTA) aimed at boosting bilateral trade and investment. The agreement, formalized on Thursday, was signed by India’s Commerce Minister Piyush Goyal and his British counterpart Jonathan Reynold in the presence of Prime Minister Narendra Modi and UK Prime Minister Keir Starmer.
This pact marks the culmination of three years of intense negotiations, opening a new chapter in India-UK economic relations. The deal is expected to increase bilateral trade by USD 34 billion annually, while providing unprecedented market access for exporters and manufacturers from both nations.
Key Highlights of the India-UK Free Trade Agreement
- Tariff Reduction on British Goods
British whisky, cars, and a range of other products will see a significant cut in import tariffs. Average tariffs will drop from 15% to 3%, making British goods more affordable for Indian consumers. - 99% Tariff-Free Access for Indian Exports
Indian exporters will gain from the elimination of tariffs on 99% of tariff lines, covering nearly 100% of trade values. This will strengthen India’s position in the UK market and boost sectors such as textiles, leather, engineering goods, and IT services. - Increased Access to British Markets
The FTA will make it easier for British companies to export high-quality products like soft drinks, cosmetics, medical devices, and premium cars to India. This liberalization will enhance consumer choice and reduce costs. - Boost to Bilateral Trade
Currently, the UK imports goods worth 11 billion pounds from India. With this deal, Indian businesses are expected to witness a surge in exports, especially in labor-intensive sectors, thus creating more employment opportunities in India.
Statements from Leaders
Calling the FTA a “major win for Britain,” UK Prime Minister Keir Starmer highlighted that the deal would strengthen economic ties and benefit both nations’ consumers and businesses.
Indian officials emphasized that this pact will drive economic growth, enhance competitiveness, and provide a level playing field for Indian manufacturers across global markets
Impact on Indian Economy
This FTA is poised to accelerate India’s exports in key sectors by offering competitive pricing in the UK market. By removing tariff barriers, Indian products such as textiles, agricultural items, jewelry, and pharmaceuticals will become more attractive to British buyers.
The India-UK Free Trade Agreement is a transformational step in bilateral relations, unlocking new opportunities for trade, investments, and economic collaboration. With tariff reductions and improved market access, both nations stand to benefit significantly.