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BUSINESS & TRADE MAY 16, 2025 | The Indian Eye 32

FREE TRADE AGREEMENT

New India-UK deal to boost import & export

besides reducing global dependence on China

SBI report highlights that around 1,800 to 2,000 visas will be given each year to Indian

professionals such as chefs, musicians, and yoga instructors

OUR BUREAU

London/New Delhi/Mumbai
he India-UK Free Trade Agreement (FTA0,
signed on Tuesday May 6th 2025, after near-
Tly three years of negotiations, is one of the
most comprehensive free trade agreement ever
entered into by India.
The FTA is likely to set a new benchmark for
equitable trade between two major economies.
Broadly, the UK-India FTA provides for tariff re-
ductions and market access on various items by
both countries. Under the agreement India will
reduce import duties on 90 per cent of tariff lines,
with 85 per cent of these becoming fully tariff-free
within ten years.
Under the agreement, almost 99 per cent of
Indian exports will receive duty-free access to the
UK market, covering nearly the entire trade value
between the two countries.
UK products such as whisky, gin, cars, cos-
metics, medical devices, advanced machinery, and
lamb will see significant tariff reductions. For ex-
ample, tariffs on whisky and gin will be halved from Union Commerce and Industry Minister Piyush Goyal speaks during the joint India-UK business reception, at Lancaster House in
150 per cent to 75 per cent initially, and further re- London. UK Secretary of State for Business and Trade Jonathan Reynolds also seen (ANI)
duced to 40 per cent over next ten years.
Tariffs on automotive will be reduced from
over 100 per cent to 10 per cent under a specified The FTA is projected to contribute USD 6.4 fore it is approved by both parliaments.
quota system. billion annually to the UK economy by 2040, while The Indian textile industry has welcomed the
The agreement will boost key sectors and boosting bilateral trade to over USD 100 billion by India-UK Free Trade Agreement (FTA), calling it
opens up bigger export opportunities for India, in 2030. The deal is expected to double bilateral trade a major step towards expanding India’s presence in
sectors like textiles, marine products, leather, foot- from its current value of about USD 60 billion. the lucrative UK market.
wear, sports goods and toys, gems and jewellery, en- The FTA also cements the India-UK Com- Industry leaders believe the agreement will
gineering goods, auto parts, and organic chemicals. prehensive Strategic Partnership and is seen as a open new doors for exporters and strengthen the
Exporters from UK will get easier access to foundation for deeper collaboration in defence, sector in terms of trade, employment, and global
the Indian market for products such as cosmetics, technology, education, and tourism. competitiveness.
aerospace components, medical equipment, salm- India and the United Kingdom FTA is seen as Santosh Katariya, President of the Clothing
on, electrical machinery, soft drinks, chocolate, a part of a new global trade strategy that aims to Manufacturers Association of India (CMAI), said
and biscuits. reduce dependence on China, manage trade chal- that the UK is one of the most promising and grow-
In services sector, India will get enhanced ac- lenges from US tariffs, and help the UK reshape its ing markets for Indian textile and apparel products.
cess to the UK market for its professionals, espe- economy after Brexit, according to a report by SBI He noted that the recent tariff-related devel-
cially in IT, financial, professional, and educational Research. The report also added that the multi-bil- opments in the US have underlined the need to
services sector. lion-pound deal will reduce tariffs on 90 per cent diversify export destinations, and this FTA comes
The FTA includes provisions for easier move- of traded goods, helping businesses on both sides. at the right time.
ment of skilled workers, including contractual ser- Though immigration rules remain mostly “Post the latest US tariff announcement, there
vice suppliers, business visitors, investors, intra-cor- unchanged, the agreement allows limited profes- was a strong need to diversify textile exports and
porate transferees, and independent professional. sional movement. The report also highlighted that with this FTA agreement, India’s knitted and wo-
There will be a three-year exemption from around 1,800 to 2,000 visas will be given each year ven apparel can now gain substantial foothold in
social security contributions in the UK for Indi- to Indian professionals such as chefs, musicians, the UK market,” Katariya said.
an workers and their employers I seen as a great and yoga instructors. This shows how the FTA also He added “By emphasizing on Sustainability,
achievement. This will result in significant cost supports cultural ties between the two countries. Quality and Digital Marketing, not only our Exports
savings and increased competitiveness for Indian The prime ministers of India and the UK are but Indian brands will also get an opportunity to
service providers. expected to meet soon to officially sign the deal be- stand out with reduced prices for UK consumers”.

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