India signs a historic Free Trade Agreement with United Kingdom
It is expected that the Double Contribution Convention and free trade agreement between the UK and India will have an important beneficial economic influence on both nations.
New Delhi (India) May 7: After a discussion with his British counterpart Keir Starmer, Prime Minister Narendra Modi announced on Tuesday that India and the UK had reached a "ambitious and mutually beneficial" free trade agreement (FTA) that will strengthen the two countries' comprehensive strategic partnership and promote investment and trade.
Three years after Modi and his former British colleague Boris Johnson set a goal to complete the FTA by October 2022, the deal was concluded. Since then, disagreements on a number of topics, such as alcohol and car tariffs, as well as protests in the UK, have changed the negotiations.
“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,” PM Modi said in a post on X on Tuesday evening.
He also added,“These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon,”
UK PM Starmer said “strengthening alliances and reducing trade barriers with economies around the world” is part of the UK’s “Plan for Change” to deliver a stronger and more secure economy.
99 percent of Indian exports will have duty-free access to UK markets because of the trade deal. By removing tariffs on around 99 percent of tariff lines, or about 100 percent of trade value, India stands to benefit considerably.
The UK's free trade agreements is also going to benefit India in a number of service areas, such as financial, professional, educational, and IT/ITeS services.
As India agrees to reduce tariffs on a number of goods, including lamb, medical products, whisky, and advanced technology, trade issues will be removed, making UK exports more competitive.
Lower import taxes on a variety of goods are part of the free trade agreement, helping Indian consumers and businesses. These consist of soft drinks, chocolate, biscuits, medical equipment, salmon, cosmetics, lamb, aerospace components, and electrical machinery.
One significant success is the three-year a break from social security contributions for Indian employees working in the UK. The Double Contribution Convention's three-year social security contribution waiver for Indian employees and their employers temporarily stationed in the UK will save Indian service providers a significant amount of money and improve their competitiveness in the UK market.
The India-UK Free Trade Agreement is strategically beneficial to both nations. It strengthens economic ties, creates new trade and job opportunities, and improves India's goal to become a global export hub.
Aadrika Tayal
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