India and UK Forge Landmark Free Trade Agreement
Historic Trade Agreement Signed
In a significant move to enhance bilateral relations, India has entered into a Free Trade Agreement (FTA) with the United Kingdom. This agreement was formalized by UK Prime Minister Keir Starmer and Indian Prime Minister Modi.
The FTA will enable 99% of Indian exports to enter the UK without any duties, covering nearly the entirety of the trade value between the two nations. In exchange, India will lower or eliminate tariffs on 90% of the items it imports from the UK, which represents 92% of total imports.
Benefits for Services and Industries
This new trade pact is expected to significantly benefit India's services sector, particularly in information technology and outsourcing. It will also facilitate the entry of financial and professional services, including management consultancy and engineering, into both markets.
Moreover, Indian tech innovations will gain access to the UK market, while UK industries such as distilleries and automotive will enjoy reduced tariffs when exporting to India.
Opportunities for Labor-Intensive Sectors
Labor-intensive industries like leather, textiles, and clothing will also see enhanced access to the UK market, which currently imports over USD 23 billion worth of these goods. This presents a strong opportunity for increased production and job creation in India, especially for the youth.
Safeguarding Local Interests
India has taken measures to protect its local industries by restricting dairy imports from the UK and limiting certain foreign goods that could adversely affect domestic markets.
Statements from Leaders
During the signing ceremony, Prime Minister Modi expressed gratitude to PM Starmer for condemning the recent Pahalgam terror attack, emphasizing the need for a unified stance against terrorism. He stated, 'There is no place for dual parameters in the fight against terrorism,' and highlighted the importance of accountability for those who misuse democratic freedoms.
The agreement was signed in London, with the presence of Union Minister of Commerce & Industry Piyush Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds.