India and Britain on Thursday signed a historic free trade agreement, under which 99 percent of Indian exports from next year will reach the UK free free, while the fees on British products such as cars and whiskey will be reduced. The agreement, which took place a few days before the end of the US restriction on high tariffs, aims to double the US $ 56 billion trade between the fifth and sixth largest economies in the world by 2030.
India has opened its market for various consumer goods, including chocolate, biscuits and cosmetics, it will get more access to export products such as clothes, shoes, gems and jewelery, sports items and toys. In addition, Indian companies such as TCS and Infosys working in Britain will not have to contribute social security for employees coming from India for three years.
Commerce and Industry Minister Piyush Goyal and his British counterpart Jonathan Reynolds signed the agreement at a function held at the British Prime Minister’s residence Checkers. Prime Minister Narendra Modi, who came here on this occasion, described this agreement as “the blueprint of our shared prosperity”.
He said, “On the one hand, Indian textiles, shoes, gems and jewelery, sea food and engineering items will get better access to the UK market. On the other hand, people of India and industry will be able to get products made in Britain, such as medical equipment and aerospace parts, at affordable and attractive prices.”
Addressing the media, Modi said that Britain and India are “natural partners” and both countries are writing a new chapter in their history. Prime Minister Keer Starmer described it as Britain’s “largest and economically most important” trade agreement after Brexit.
He said, “Britain had been talking about such an agreement for many years, but it is the government that has fulfilled it, and with this we are sending a very powerful message that Britain is open to trade, and is already causing a lot of trust.”
For India, the FTA represents its most important strategic partnership with an advanced economy and can serve as a model for future agreements, including a possible agreement with the European Union.
Under the agreement, called the Clastic Economic and Trade Agreement (CETA), the tariff on Scotch Whiskey will be immediately reduced from 150 percent to 75 percent, and will be reduced to 40 percent by 2035.
India will gradually reduce the import duty in five years to 10 percent on automobiles, which is currently up to 110 percent. In turn, Indian manufacturers will have access to the UK market for electric and hybrid vehicles, that too within the quota structure.
Under the trade agreement, India has only given Britain’s auto exporters to large petrol and diesel vehicles and high -priced E.V. Fee concessions are provided on, while the sensitive areas of the domestic automotive industry, especially medium and small cars and low -priced E.V. Has provided protection to.
Electric, hybrid and hydrogen driven vehicles will not be given any concession in the first five years of the agreement.
On the other hand, India will get a fee-free access to many agricultural products such as fruits, vegetables, grains, turmeric, black pepper, cardamom, and processed products such as ready-to food, mango pulp, pickles and pulses in the UK.
More than 95 percent of agriculture and processed foods will be reduced to zero. Sea products such as shrimp, tuna, fish food and fodder, which currently taxed between 4.2 percent to 8.5 percent, will be completely free after the agreement is implemented. It may take about a year, as it requires the approval of the British Parliament.
In the textile sector, India is facing losses due to fee-free access compared to Bangladesh, Pakistan and Cambodia, which have a fee-free access in the UK market. Now this free trade agreement will eliminate duty on textile imports from India, which will increase its value competitiveness in the UK market.
Products that are expected to increase rapidly include RMG (readymade garments), domestic textiles, carpets and handicrafts, where the removal of charges will create competitive benefits.
Within 1 to 2 years of the implementation of the agreement, India is expected to get at least 5 percent additional market share in the UK. The agreement also announced the removal of tariffs on Indian engineering exports (current 18 percent) to Britain. Due to this, domestic exports in the next five years can double US dollars to double the US dollars by 2029-30.
The UK will lead to a major boost to India’s generic drugs and medical devices, such as X-ray systems and surgical devices, after consenting zero charges under the Free Trade Agreement.
In the service sector, this agreement will enable Indian financial services companies to increase their presence in Britain, increase their competitiveness and serve Indian community and businesses. For the financial services provided digitally, the UK has provided market access to various sub-sectors under insurance and insurance-related, and banking and other financial services.
With respect to the insurance sector, this agreement is expected to enable non-life insurance services and insurance arbitrations (goods in maritime shipping and international transit), re-rehabilitation and repayment, and insurance assistant services capable of expanding their operations in India.
India has also tied up on the double contribution agreement, under which Indian professionals and their employers will get exemption from social security payment in the UK for three years, which will improve the cost of Indian talents.
Commerce and Industry Minister Piyush Goyal said that this will provide fee -free access to many domestic areas such as leather, power machinery and chemicals in the British market, which will open about 23 billion US dollars.
Goyal said in a post on X, “About 99 percent of Indian exports free access will open about US $ 23 billion opportunities for labor-dominated areas, which will symbolize a new era for inclusive and gender-ecological development.”
Commenting on the agreement, the Indian industry said that the agreement is a transformational moment in the global economic scenario, which prepares a modern, value-based partnership.
