Our Bureau
New Delhi
India and the United Kingdom have turned a new chapter by signing a multi-billion-pound free trade agreement on Tuesday i.e., 6th May 2025. The deal is said to be a major boost to the economies of both countries and will help boost the trade between both nations. The FTA ensures that 90% of tariff lines are reduced and it will also enhance Britain economy by contributing 4.8 billion pounds ($6.4 billion) by the end of 2040.
The Free Trade Agreement (FTA) was confirmed through a telephonic discussion between Narendra Modi and Keir Starmer, the Prime Ministers of both nations. The deal will now be formalized textually in the coming months and will be placed before the British Parliament for approval before its implementation.
This FTA is set to enhance the trade value between both countries by 25.5 billion pounds and is expected to reach $120 billion by the end of 2030 nearly doubling its value from $60 billion currently. The FTA has also ensured duty free access to 99% of Indian exports to the British market. It will also make sure that India will gain an edge due to the removal of tariffs from around 99% of tariff lines, covering nearly 100% of trade value.
The FTA is a major boon for the Indian export markets and service sectors as it will allow more accessibility for their goods in UK market. FTA creates major export opportunities for textiles, marine products, gems and jewellery, auto parts and organic chemicals. Along with that, it will also benefit the consumers residing in the UK as the FTA will help reduce the prices of goods by way of reduction in import duties such as apparel, shoes and food items.
The import of whiskey and gin will become cheaper in India as FTA proposes to reduce the import duties from 150% to 75% which will later be reduced to 40% by the 10th year of the deal. The automobile sector will also benefit from free trade agreement as automotive tariffs will also be reduced from over 100% to 10% under a specified quota system.
All in all, the Free Trade Agreement could be transformative for both countries in the upcoming future as it will facilitate more trade and help both countries to expand the size of their economy.
