India-UK Free Trade Deal Nears Historic Signing

The India-UK Free Trade Agreement (FTA) is on the verge of being officially signed, with July 24 earmarked for its conclusion during Prime Minister Narendra Modi’s visit to the UK. This deal marks a major milestone in India’s global trade relationships and is expected to bring substantial benefits for both nations.

The agreement, originally agreed upon on May 6, has now completed legal checks and final negotiations — especially around the sensitive issue of automobile tariff concessions. With this, the final stage has been reached, and the official signing is just around the corner.

Major Tariff Relief for Indian Exports

One of the standout features of this FTA is that India’s exports will receive duty elimination on about 99% of tariff lines, covering nearly the entire trade value. This is a game-changer for several labour-intensive industries, including:

• Textiles

• Marine products

• Leather and footwear

• Sports goods and toys

• Gems and jewellery

This zero-duty access is expected to give Indian manufacturers a strong competitive edge in the UK market, opening up massive new opportunities for these sectors.

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British Goods to See Lower Duties in India

India, in return, will also slash duties on British imports. The deal outlines duty reductions on 90% of tariff lines, with 85% becoming fully duty-free within 10 years.

Among the most discussed concessions:

• British whiskey and gin tariffs will reduce from 150% to 75%, and eventually to 40% over ten years.

• Automobile tariffs, currently over 100%, will be lowered under a quota system, going down to just 10% gradually over a decade.

This phased structure ensures that domestic industries get time to adjust, while consumers benefit from greater variety and affordability.

Mutual Gains: EVs, Hybrids, and Social Security

The UK has secured staged access to the Indian market for electric vehicles (EVs) and hybrids, using a quota system. This aligns with the UK’s shift toward green mobility and supports its automotive industry’s transition.

On the other hand, India gains on the social security front, with both countries expected to ease the burden of social security contributions for their professionals working overseas — a long-standing demand from Indian IT and service companies.

The India-UK FTA is poised to become a landmark trade agreement, reshaping economic ties between the two countries. From gin to gems, and from tariff relief to mutual strategic gains, this deal promises to unlock substantial value for both economies.

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