India Strikes Gold: 99% of Exports to UK Now Duty-Free in Mega Trade Deal

India and the United Kingdom have agreed on a historic Free Trade Agreement, taking economic ties between the two countries to a great new height. The agreement was announced after a phone call between Prime Minister Narendra Modi and UK Prime Minister Keir Starmer, ending three years of talks and promising to redefine the trade map for both nations.

Key Highlights

Almost 99% of Indian exports will now have zero-duty access to the UK market, covering virtually the entire bilateral trade value. This will likely significantly enhance Indian exports, particularly in the areas of engineering, textiles, and agriculture.

The pact is one of India's most far-reaching trade agreements, giving Indian companies unprecedented access to British markets. For Indian consumers, this means they can expect tariffs on UK imports to come down gradually, including high-end items like Scotch whisky, gin, and lamb.

The FTA also deals with non-tariff barriers and has commitments on digitally delivered services, which provides opportunities for India's expanding IT and services industry.

One of the most significant provisions is the longer transition period for electric vehicles, enabling both parties to adapt gradually to new trade standards in this fast-changing industry.

The agreement is supplemented by the Double Contribution Convention, a social security agreement that will be advantageous to Indian professionals temporarily employed in the UK by preventing double social security charges.

Bilateral trade between India and the UK reached $21.34 billion in FY24, and both governments aim to double this figure within the next decade.

The agreement is in line with India’s vision of Viksit Bharat 2047 and is expected to catalyze investment, job creation, and innovation in both economies.

India-UK Free Trade Agreement is being seen as a new benchmark for balanced and ambitious trade, enhancing the strategic partnership and offering new prospects for business and professionals alike. 

Sources: Economic Times, Business Today, Indian Express, Times of India, Press Information Bureau