India and the United Kingdom have secured a long-pending Free Trade Agreement (FTA) on May 6, with Indian exports set to benefit from duty elimination on about 99 percent of the tariff lines, covering almost 100 percent of the trade value.
According to a statement from Indian Commerce Ministry, the FTA with UK is expected to boost exports of labour and technology intensive sectors such as textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery.
Other key exports like engineering goods, auto parts and engines and organic chemicals are expected to get a boost too.
"India has ensured that non-tariff barriers are suitably addressed to ensure free flow of goods and services and that they do not create unjustified restrictions to India’s exports," the statement added.
The British government informed that through the trade deal, Indian tariffs will be slashed, locking in reductions on 90 percent of tariff lines, with 85 percent of these becoming fully tariff-free within a decade.
Notably, whisky and gin tariffs will be halved from 150 percent to 75 percent before reducing to 40 percent by year ten of the deal, while automotive tariffs will be reduced to 10 percent under a quota.
"Other goods with reduced tariffs, which can open markets and make trade cheaper for businesses and Indian consumers, include cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits," UK said in a statement.
The deal is expected to increase bilateral trade between India and UK by £25.5 billion.
The UK began free trade talks with India in January 2022, viewing the deal as one of Brexit’s most valuable opportunities. However, multiple Conservative-led governments have failed to finalise the agreement despite efforts to secure it swiftly.
The FTA, which has 26 chapters including goods, services, investments, and intellectual property rights was originally slated to be signed during Diwali 2022,
Calling it a historic milestone, Prime Minister Narendra Modi said that the FTA between the two nations will be ‘mutually beneficial’. He also invited his British counterpart Starmer to visit India soon.
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