Does the India-UK FTA Mark a New Trade Era?
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Synopsis
The India-UK FTA is a game-changer for trade relations, providing significant benefits for Indian exporters and enhancing economic ties. Discover how this agreement opens new avenues for growth and prosperity between the two nations.
Key Takeaways
- 99% of Indian exports will benefit from zero duty.
- Enhanced market access for Indian exporters.
- Focus on sustainable and inclusive economic growth.
- New job opportunities in various sectors.
- Significant financial advantages for Indian service providers.
New Delhi, May 7 (NationPress) The India-UK free trade agreement (FTA) marks a transformative milestone in trade relations between the two nations, as stated by Finance Minister Nirmala Sitharaman.
On Tuesday, Prime Minister Narendra Modi and UK Prime Minister Sir Keir Starmer unveiled the successful completion of this mutually advantageous India-UK FTA, which is expected to benefit 99 percent of Indian exports through zero tariffs.
In a post on the X social media platform, FM Sitharaman emphasized that under the guidance of PM Modi, India is poised to become a key driver of economic growth.
“This agreement will facilitate enhanced market access for Indian exporters. This will allow industries and innovation to thrive,” the Finance Minister elaborated.
She noted, “Establishing bilateral agreements is becoming increasingly vital. While multilateral deals have had their time, the current landscape favors nations crafting their own bilateral frameworks,” during a plenary session at the 'NEXT Milan Forum' held at Bocconi University in Milan, Italy.
The FTA is set against the backdrop of strengthening economic ties between India and the UK, highlighted by their bilateral trade, which currently stands at approximately $60 billion and is expected to double by 2030.
This all-encompassing and forward-thinking agreement is the result of extensive negotiations aimed at enhancing trade and investment connections across diverse sectors, including goods, services, and technology.
It aims to promote sustainable and inclusive economic growth, bolster resilient supply chains, and create high-quality job opportunities in India, as per government sources.
The FTA guarantees extensive market access for goods across all sectors, addressing India's export interests comprehensively. India will benefit from tariff reductions on approximately 99 percent of tariff lines, encompassing nearly 100 percent of trade value, creating substantial opportunities for increased bilateral trade between India and the UK.
Moreover, India will enjoy one of the most ambitious FTA commitments from the UK in services such as IT/ITeS, financial services, professional services, and educational services, paving the way for new job opportunities.
The exemption for Indian workers temporarily residing in the UK, along with their employers, from paying social security contributions for three years under the Double Contribution Convention, will lead to significant financial advantages for Indian service providers and enhance their competitiveness in the UK market. This will result in new job opportunities and benefit many Indians working in the UK.
India has also ensured that non-tariff barriers are adequately addressed to facilitate the smooth flow of goods and services, preventing any unjustified restrictions on India's exports.
Point of View
It is essential to recognize that the India-UK FTA represents a significant milestone in fostering economic collaboration. This agreement not only benefits trade but also opens doors for innovation and job creation, aligning with India's growth strategy.
NationPress
23/05/2025
Frequently Asked Questions
What are the main benefits of the India-UK FTA?
The FTA will provide Indian exporters with significant market access, eliminate tariffs on 99% of goods, and open new opportunities in services, ultimately boosting bilateral trade.
How will this agreement affect Indian workers in the UK?
Indian workers in the UK will be exempt from paying social security contributions for three years, enhancing their financial gains and competitiveness.
What sectors will benefit from this FTA?
The agreement covers various sectors, including goods, services, technology, IT/ITeS, financial services, and educational services.
What is the expected impact on bilateral trade by 2030?
Bilateral trade is projected to double from approximately $60 billion to $120 billion by 2030, reflecting the growing economic ties.
How does this FTA address non-tariff barriers?
India has ensured that non-tariff barriers are addressed to facilitate the free flow of goods and services, preventing unjust restrictions on exports.
