India and the United Kingdom have signed a historic free trade agreement during Prime Minister Narendra Modi’s visit to the UK, where he met British Prime Minister Keir Starmer.
The deal, which had been in talks for nearly three years, is expected to boost trade between the two countries by around $34 billion every year.
Commerce Minister Piyush Goyal and his UK counterpart Jonathan Reynolds signed the agreement in the presence of both Prime Ministers.
With this deal, tariffs will be reduced on several UK products coming into India, while Indian exporters will also see big benefits.
Goyal said the agreement offers duty-free access to about 99% of Indian exports and could unlock nearly $23 billion in new opportunities, especially for labour-intensive industries. He added that this marks a step forward for inclusive and gender-equal growth.
Here’s what gets cheaper with this trade deal
- People and industries in India will be able to access several products made and imported from the United Kingdom, such as medical devices and aerospace parts, at much affordable prices.
- According to the United Kingdom, Indian customers will also have better access to British products such as soft drinks, cosmetics and also cars. This will be possible because India’s average tariff on UK products will drop from 15 per cent to 3 per cent after the FTA kicks in.
- With this trade deal, it will be easier for British firms to also export whisky to India with tariffs slashed in half, reduced immediately from 150% to 75% and then dropped even further to 40% over the next ten years – giving the UK an advantage over international competitors in reaching the Indian market.
- Nik Jhangiani, Interim Chief Executive of Diageo, said, “This agreement marks a great moment for both Scotch and Scotland, and we’ll be raising a glass of Johnnie Walker to all those who have worked so hard to get it secured.”
- Also, the trade deal makes it more affordable for Indians to live in the UK. Indian firms and freelancers will have access to 36 service sectors in the UK with no ‘Economic Needs Test’.
- Indian professionals can work in 35 UK sectors for 24 months, even without an office in the country.
- Indian professionals will be exempt from UK social security payments for three years under this deal.
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