India, UK sign FTA to raise bilateral trade to $120 bn by 2030

The deal, agreed upon in May this year, was signed in the presence of Prime Ministers Narendra Modi and Keir Starmer. Indian commerce and industry minister Piyush Goyal and his British counterpart Jonathan Reynolds signed the document.

The agreement will help facilitate lower tariffs on India’s exports of labour-intensive goods including textiles, leather goods, footwear, clothing, sports equipment and organic chemicals, while reducing import duties on British whisky and automobiles.

“A landmark deal with India means jobs, investment and growth here in the UK. It creates thousands of British jobs, unlocks new opportunities for businesses and puts money in the pockets of working people. That’s our Plan for Change in action,” Starmer posted on X.

The agreement ensures that 99 per cent of exports from India would receive duty-free access to British markets.

The FTA sections address various aspects of trade, including goods, services, innovation, government procurement and intellectual property rights.

It aims at facilitating market access and cost-effective trade for businesses and Indian consumers via reduced import duties on several products.

A reduction in tariffs combined with a reduction in regulatory barriers to trade between both sides are estimated to raise UK exports to India by nearly 60 per cent in the long run, a UK government release noted. This is equivalent to an additional £15.7 billion of UK exports to India when applied to projections of future trade in 2040.

India’s average tariff on UK products will drop from 15 per cent to 3 per cent. The tariff reduction will also increase bilateral trade by nearly 39 per cent in the long run, equivalent to £25.5 billion a year, when compared to 2040 projected levels of trade in the absence of an agreement, the release said.

The UK clean energy industry will have brand new, unprecedented access to India’s vast procurement market as the latter makes the switch to renewable energy and continues to see growing energy demand.

The agreement requires the British parliament's endorsement before implementation, and that may take nearly one year.

India's exports to the United Kingdom witnessed a growth of 12.6 per cent reaching $14.5 billion, while imports from there increased by 2.3 per cent to $8.6 billion in fiscal 2024-25.

ALCHEMPro News Desk (DS)