New Delhi: The India-UK Free Trade Agreement (FTA) is likely to come into effect from April this year. A senior official said the agreement is currently being discussed in both Houses of the UK Parliament. Once approved, it will be implemented.
The agreement was signed in July last year after Prime Minister Narendra Modi and UK Prime Minister Keir Starmer announced the successful conclusion of talks in May.
Big Boost For Indian Exports
Under the FTA, 99 percent of Indian exports to the UK will face zero import duty. This is expected to open large opportunities for Indian businesses.
Sectors that may benefit include textiles, leather, footwear, marine products, sports goods, toys, gems and jewellery. Other sectors such as engineering goods, auto parts, engines and organic chemicals are also expected to gain.
The government said India has also addressed non-tariff barriers to ensure smooth flow of goods and services without unfair restrictions.
Gains For Services And Workers
The agreement is also expected to increase trade in services. Areas such as IT and IT-enabled services, financial services, professional services and education may see growth.
A Double Contribution Convention has also been signed. This will protect Indian workers in the UK. Indian employees working temporarily in the UK and their employers will not need to pay social security contributions there for three years.
This move is expected to make Indian service providers more competitive.
Tariff Cuts On Whisky And Cars
India will reduce tariffs on Scotch whisky from 150 percent to 75 percent, and then to 40 percent by 2035.
Import duties on automobiles will also be cut from up to 110 percent to 10 percent over five years under a quota system. In return, Indian electric and hybrid vehicle makers will get access to the UK market under a quota framework.
Trade Target
India and the UK currently have bilateral trade of about $60 billion. Both countries aim to double this figure by 2030.
