India-UK FTA Deal: Low Prices For Cars And Whiskey, Jobs Boost, Other Benefits For India
India-UK FTA Benefits: India concludes successfully the free trade agreement with the UK, eliminating almost 99% tariffs. Will the FTA benefit India?
India-UK FTA Benefits: In a historic trade deal, India has concluded a Free Trade Agreement (FTA) with the United Kingdom, eliminating tariffs on 99 per cent of India products entering the UK market. Prime Minister Narendra Modi announced the FTA as “historic milestone" that India and the UK have achieved in concluding an FTA between the two countries.
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The FTA also facilitates the unrestricted movement of Indian professionals to Britain for employment without hampering the UK’s existing points-based immigration framework.
According to reports, the trade between India and the UK has constantly risen in the past few years, with the former maintains a favourable trade surplus. It reached $21.34 billion in 2023-24, against $20.36 billion in 2022-23.
British Prime Minister Keir Starmer on X said that “Today Britain has agreed a landmark trade deal with India".
How Will India-UK FTA Deal Impact India?
1. India’s export to Britain will likely expand after FTA deal as it offers extensive market accessibility without the umbrella of tariffs across all sectors.
2. As India has a trade surplus with Britain, the former will get the direct benefits, creating substantial advancement in rising exports for the country.
3. The FTA deal will likely create new export avenues in different sectors including textiles, marine products, leather, footwear, sports goods, and toys, gems and jewellery.
4. The agreement removes tariffs on exports of labor-intensive products, including leather goods, footwear, and garments. Indian exports like apparel, frozen prawns, and precious stones and jewellery will benefit from reduced tax rates. It also supports key industries such as engineering goods, auto parts and engines, and organic chemicals, significantly boosting the competitive edge of Indian products in the UK market.
5. According to the government, the Free Trade Agreement will generate substantial job opportunities throughout India. British industries will see notable advantages, including a reduction in Scotch whisky duties from 150 percent to 75 percent, eventually decreasing to 40 percent, leading to more affordable Scotch whisky for Indians. Automotive duty rates will drop from over 100 percent to 10 percent, with quota restrictions in place. UK-manufactured cars, like Jaguars and Land Rovers, will see a reduction from over 100 percent to 10 percent under a quota system, enhancing access to the Indian automotive market and resulting in cheaper UK cars.
6. India has successfully ensured the inclusion of additional professional categories, such as chefs, musicians, and yogis, within the UK’s visa pathways. The Free Trade Agreement commitments will benefit India across multiple service sectors, including IT/ITeS, financial services, professional services, and educational services.
7. The trade deal also features reduced import duties on various products, benefiting Indian businesses and consumers. Covered items include cosmetics, aerospace parts, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate, and biscuits.
8. A wide range of Indian products will enter the UK market duty-free, including minerals, chemicals, gems and jewellery, plastic, rubber, wood, paper, textile, clothing, glass, ceramic, base metals, mechanical and electrical machinery, arms/ammunition, transport/auto, furniture, sports goods, animal products, and processed food.
Moreover, India has secured a significant agreement regarding a Double Contributions Convention, ensuring professionals do not pay duplicate national insurance or social security contributions while working in either country. This social security arrangement, considered a “huge win" by India, was one of three agreements under negotiation, alongside trade and investment pacts.
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