India and the United Kingdom signed a historic free trade arrangement on Thursday during Prime Minister Narendra Modi's visit to the UK, where he met his British counterpart Keir Starmer.
This free trade agreement, which had been pending negotiations for nearly three years, will provide a much-needed impetus to bilateral trade between the two countries by approximately $34 billion a year.
The Prime Ministers of India and the United Kingdom, Narendra Modi and Theresa May, respectively, witnessed the signing of the historic agreement by the commerce ministers of both nations.
India will now witness tariff reductions on various products imported from the UK as well as the Indian export businesses benefiting significantly.
Commerce and industry minister Piyush Goyal stated that the agreement opens duty-free access for nearly 99% of Indian exports, which will open "nearly $23 billion worth of opportunities for labour-intensive industries, ushering in a new era for inclusive and gender-equitable growth.
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.”
India will also cut tariffs salmon, chocolates, biscuits imported from the UK, which means that they will potentially be avaiable at better prices for Indians.
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.
