India-UK Free Trade Agreement: What gets cheaper for Indians; know here
PTC Web Desk: In a historic development, India and the United Kingdom on Thursday signed a comprehensive Free Trade Agreement (FTA) in London, poised to boost bilateral trade by nearly $34 billion annually. The signing ceremony coincided with Prime Minister Narendra Modi’s visit to the UK, with Indian Commerce Minister Piyush Goyal and UK Business Secretary Jonathan Reynolds formalising the deal.
Marking a significant milestone in the India-UK relationship, this agreement is India’s most ambitious trade deal in over a decade and the UK’s first major post-Brexit economic pact. Leaders from both sides hailed the FTA as a future-oriented roadmap for economic cooperation and shared prosperity.
“This pact is not just about trade—it’s about strengthening ties, empowering businesses, and creating a win-win for our people,” said PM Modi.
Wide-ranging benefits for Indian exporters
The FTA is set to dramatically expand access for Indian goods to the UK market, with products such as textiles, gems and jewellery, seafood, leather goods, engineering goods, and processed foods now enjoying near zero-duty access. Industry experts believe this will particularly benefit India’s labour-intensive sectors, spurring employment and rural incomes.
India’s leather industry anticipates capturing an additional 5% share of the UK market within two years. Engineering and electronics exports are projected to double by 2030, while chemical exports are expected to grow by 40% in the next fiscal. Software services may see a 20% annual growth once the agreement comes into effect.
Indian professionals to gain access to 35 UK sectors
One of the most impactful aspects of the agreement is the eased mobility for Indian professionals. The FTA opens up 35 sectors for Indian talent, including freelancers, chefs, musicians, yoga instructors, and contract-based workers, allowing them to work in the UK for up to two years without the need for a local office.
Over 60,000 Indian IT professionals—particularly those from firms like TCS, Infosys, Wipro, HCL Technologies, and Tech Mahindra—are expected to benefit annually.
A landmark social security arrangement has also been included, exempting Indian professionals on short-term assignments in the UK from paying British social security contributions for up to three years.
UK to enjoy greater access to Indian market
From the UK’s perspective, the agreement will make 90% of its exports to India cheaper, with 85% of goods becoming fully duty-free over the next 10 years. British exports such as cars, medical devices, aerospace parts, cosmetics, whisky, and chocolates will see tariffs drop from an average of 15% to around 3%.
British companies will also be allowed to bid on non-sensitive Indian government contracts worth over Rs 2,000 crore, unlocking access to nearly 40,000 tenders annually. This is expected to create over 2,000 new jobs and inject £2.2 billion in wages into the UK economy.
The agreement also includes dedicated chapters on financial services and intellectual property, offering UK firms equal treatment with Indian companies in the financial sector. Concerns over India’s generic drug access were addressed, ensuring no compromise on affordable medicine availability.
UK Prime Minister Keir Starmer welcomed the deal, calling it a “big win for Britain”, saying it would bring fresh investments and job opportunities. As a part of the broader trade engagement, 26 UK-based companies are set to launch new business ventures in India.
“This agreement unlocks new potential for both our economies. It’s a future-ready partnership that will benefit workers, businesses, and consumers alike,” Starmer said.
- With inputs from agencies
