• Source:JND

UK-India FTA: India and the United Kingdom are set to begin a new chapter in their economic partnership as the long-awaited Free Trade Agreement (FTA) officially comes into force on July 15. The deal is expected to boost trade, investment, and business opportunities between the two countries.

British High Commissioner to India, Lindy Cameron on Wednesday confirmed the development, calling it a historic moment. She wrote on X, “The countdown begins! The UK and India have agreed that the Free Trade Agreement will come into effect on 15 July. An historic moment for the modern UK-India partnership, unlocking a new era of growth for both our economies.”

What Is The Deal About?

The India-UK FTA is one of the biggest trade agreements signed by both countries in recent years. After years of negotiations, the pact will reduce tariffs on a wide range of goods, improve market access for businesses, and make it easier for companies to operate in both countries.

The UK government has described it as one of Britain's most significant post-Brexit trade deals. The deal is expected to increase bilateral trade by 25.5 billion pounds annually in the long run and boost the UK economy by 4.8 billion pounds. “The deal, which is the most comprehensive ever agreed by India, will boost UK GDP by £4.8bn, real wages by £2.2bn and bilateral trade by £25.5bn every year in the long run,” the UK government noted in a press release.

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How will it benefit India?

For India, the agreement opens up greater access to one of Europe's largest markets. Indian exporters are expected to benefit across sectors such as textiles, clothing, footwear, food products, manufacturing, technology, services, and agriculture. The UK will reduce tariffs on several Indian goods entering the British market, making Indian products more competitive and potentially increasing exports.

“The UK will cut tariffs on Indian goods coming into the country such as clothes, footwear, and some food products. Less cost for British businesses importing Indian products could mean cheaper prices and more choice for consumers across the country,” the UK government added. Furthermore, Indian businesses will also benefit from simpler trade rules, reduced barriers, and improved opportunities to invest and expand operations in the UK.

Another major benefit is for Indian professionals working in the UK. Under the accompanying Double Contributions Convention Agreement, Indian professionals on eligible visa routes will be able to continue contributing to their home country's social security system without paying duplicate social security contributions abroad for a specified period.

“We have extended the benefit for UK nationals moving to India to work and continue to build entitlement to a UK State Pension from 36 months to 60 months. They will continue to pay National Insurance Contributions during that period, without also having to pay social security contributions in India,” the statement further noted.

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