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Prime ministers

India and UK Sign Historic Free Trade Agreement, Set to Boost Bilateral Trade

Strategic Insights

— 1 min read

Prime Minister Narendra Modi has formally signed the long-awaited Free Trade Agreement (FTA) between India and the United Kingdom, marking a significant turning point in bilateral relations. The FTA is expected to benefit India from tariff elimination on approximately 99 per cent of tariff lines, covering nearly 100 per cent of trade value. This development is set to boost bilateral trade between India and the UK, with opportunities to expand key Indian exports, including agricultural produce, processed food, textiles, gems and jewellery, footwear, seafood, and engineering goods.

Key Takeaways:

  • The FTA is expected to benefit 99 per cent of Indian exports from tariff elimination, covering nearly 100 per cent of trade value.
  • The deal will particularly benefit Indian youth, farmers, fishermen, and the MSME sector.
  • Key Indian exports, including agricultural produce, processed food, textiles, gems and jewellery, footwear, seafood, and engineering goods, are set to benefit from reduced tariffs and easier entry into the UK.
  • The deal is expected to increase UK exports to India by nearly 60 per cent in the long run, equivalent to an additional £15.7 billion of UK exports to India in 2040.
  • Bilateral trade is set to increase by nearly 39 per cent in the long run, equivalent to £25.5 billion a year, compared to 2040 projected levels of trade in the absence of an agreement.
  • The deal is a significant step towards fostering prosperity, growth, and job creation in both countries.
  • The agreement is expected to benefit Indian businesses, particularly MSMEs, by providing easier access to the UK market.

Statistics:

  • 99 per cent of Indian exports to benefit from tariff elimination.
  • 100 per cent of trade value covered by tariff elimination.
  • £15.7 billion - additional UK exports to India anticipated in 2040.
  • 60 per cent - increase in UK exports to India in the long run.
  • £25.5 billion - increase in bilateral trade in the long run.
  • 39 per cent - increase in bilateral trade in the long run.
  • 2040 - year by which the deal's impact is expected to be felt.

Sources:

  • "India-UK trade deal: What will be the impact?" by IE Online Media Services Pvt. Ltd.
  • "India, UK seal free trade pact, sign historic trade agreement" by IE Online Media Services Pvt. Ltd.
  • "UK-India FTA will be a game-changer, says UK PM Keir Starmer" by Contify.com
  • "PM Modi arrives in London for two-day visit, signs India-UK FTA" by Contify.com

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