UK Prime Minister Starmer announces the largest trade agreement made since leaving the EU, specifically with India, marking a significant economic milestone.
In a significant move, Prime Minister Narendra Modi and British Prime Minister Keir Starmer have signed the much-anticipated Free Trade Agreement (FTA), marking a step towards deeper partnerships and alliances. This landmark agreement is expected to boost annual bilateral trade by around USD 34 billion.
The FTA, hailed by Keir Starmer as the "biggest and most economically significant trade deal" since the UK left the European Union, brings specific benefits across multiple sectors.
In agriculture, India will gain duty-free access on over 95% of tariff lines for products like fruits, vegetables, pulses, spices, and more. This could increase agri-exports by 20% over three years, supporting India's $100 billion agri-export goal by 2030. Sensitive items such as dairy and edible oils remain protected.
Marine products, such as shrimp, tuna, fishmeal, and other seafood, will see tariffs eliminated, opening a $5.4 billion opportunity for India to expand its current 2.25% share in the UK marine imports.
In the textiles and apparel sector, approximately 1,143 product categories will enter the UK market duty-free, benefiting coastal economies and potentially increasing India's market share in the UK.
Engineering goods, auto components, pharmaceuticals, chemicals, and marine products from states like Maharashtra and Gujarat are expected to benefit from tariff cuts and better market access.
The FTA also reduces or eliminates duties in sectors vital for job creation, such as footwear, gems, jewelry, and leather, improving export competitiveness.
On the UK side, tariff cuts in sectors like aerospace, automotives, and electrical machinery will benefit British industries. Indian tariff reductions on UK-origin alcoholic beverages like whisky and brandy, which currently face very high duties, will be phased in over 10 years.
The FTA also enhances market access for Indian IT, IT-enabled services, financial, legal, professional, and educational services, encouraging deeper economic integration.
The agreement is designed to double bilateral trade from nearly $56 billion to a significantly higher level by 2030, supporting growth across labor-intensive industries and advanced manufacturing. It is expected to boost wages, raise living standards, and put more money in the pockets of the working class.
As part of the FTA, India will cut tariffs on 90% of the UK products, while the UK will reduce duties on 99% of Indian exports. The UK government has announced nearly six billion pounds in investments and exports between India and the UK, creating 2200 jobs for British workers.
The India-UK Vision 2035 Strategy, launched by Keir Starmer and PM Modi, aims to strengthen the relationship between the two nations, making it more ambitious, modern, and focused on the long-term. The FTA is expected to bring hundreds of millions of pounds to the regions and nations across the UK.
In conclusion, the India-UK Free Trade Agreement promises to be a game-changer, benefiting industries, workers, and economies on both sides. It is a significant step in the step-up in the relationship that was discussed last year, and it sends a powerful message that the UK is opening for business, generating confidence.
- The Free Trade Agreement (FTA) between India and the UK is anticipated to boost the economy by increasing agri-exports, marine imports, and job creation, especially in sectors like footwear, gems, jewelry, and leather.
- The FTA will provide duty-free access for over 1,143 product categories in the textiles and apparel sector, benefiting coastal economies and potentially increasing India's market share in the UK.
- The UK side will benefit from tariff cuts in sectors like aerospace, automotives, and electrical machinery, encouraging growth and investment in British industries.
