New Delhi — The Free Trade Agreement (FTA) between India and the United Kingdom is expected to be implemented from April this year, a senior official said on Sunday. The agreement is anticipated to significantly boost Indian exports to the UK.
The trade pact, signed in July last year, is currently awaiting approval from the UK Parliament before it becomes operational. The ratification process has already begun, with discussions underway in both Houses of Parliament.
According to official statements, nearly 99 per cent of Indian exports to the UK will benefit from zero-duty access under the agreement. This is expected to create major export opportunities for labour-intensive sectors such as textiles, marine products, leather goods, footwear, sports equipment, toys, and gems and jewellery. Additionally, key sectors including engineering goods, automobile components and engines, and organic chemicals are also likely to gain from the arrangement.
India has also ensured that non-tariff barriers are addressed adequately to facilitate the smooth movement of goods and services, preventing unnecessary restrictions on exports.
The successful conclusion of the FTA was jointly announced in May last year by Prime Minister Narendra Modi and his British counterpart Keir Starmer following a telephonic discussion between the two leaders.
Alongside the FTA, both countries have signed a Double Contribution Convention aimed at protecting the interests of Indian professionals working in the UK. Under this arrangement, Indian employees temporarily working in Britain, along with their employers, will be exempt from paying social security contributions in the UK for up to three years, improving the competitiveness of Indian service providers.
The agreement is also expected to significantly enhance trade in services, including Information Technology and IT-enabled services, financial and professional services, business services, and education.
Under the terms of the deal, tariffs on Scotch whisky will be reduced from 150 per cent to 75 per cent initially and further lowered to 40 per cent by 2035. India will also gradually reduce import duties on automobiles from as high as 110 per cent to 10 per cent over five years under a quota-based system. In exchange, Indian manufacturers will gain access to the UK market for electric and hybrid vehicles within defined quota limits.
The FTA comes amid strengthening economic ties between India and the UK, with bilateral trade currently valued at approximately $60 billion and projected to double by 2030.
With inputs from IANS