India, UK ink multibillion-dollar free trade deal

(MENAFN) India and the United Kingdom have signed a landmark multibillion-dollar free trade agreement (FTA) in London during a meeting between Prime Ministers Narendra Modi and Keir Starmer.

Modi hailed the deal as a “milestone moment,” while Starmer called it the UK’s “most significant economic agreement” since leaving the European Union. “I’m pleased that after years of effort, our nations have finalized the Comprehensive Economic and Trade Agreement,” Modi said, highlighting benefits for key Indian sectors such as textiles, gems and jewelry, seafood, footwear, and engineering products.

As part of the deal, India will slash its average import tariff on UK goods from 15% to 3%, making British exports like whisky, gin, cosmetics, medical devices, luxury vehicles, and electronics more affordable in the Indian market.

Indian Commerce Minister Piyush Goyal noted that the deal provides duty-free access for 99% of Indian exports to the UK, opening up nearly $23 billion in opportunities for labor-intensive industries and promoting inclusive, gender-equitable economic growth.

In 2024, trade between India and the UK stood at $57.7 billion, and the two countries aim to boost this figure to $120 billion by 2030.

India’s services sector will also gain from the agreement, particularly in fields such as information technology (IT), IT-enabled services, financial and professional services, and education.

Another key component is the exemption of Indian professionals on temporary assignments in the UK (up to three years) from social security contributions. Goyal emphasized that this will benefit chefs, yoga instructors, artists, and business visitors, aligning with India’s goal of becoming a global hub for skilled talent.

While the agreement has received approval from India’s cabinet, it still requires ratification by the British Parliament and is expected to take effect within a year, according to the BBC.

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