What are the Provisions of the India-UK Free Trade Agreement?
On May 6, 2025, the United Kingdom and India signed a landmark free trade agreement (FTA), marking a significant milestone in their bilateral trade relations. The agreement is expected to boost trade between the two nations by a whopping ₹2.8-lakh crore (approximately $37 billion) per year by 2040. In this blog post, we will delve into the key provisions of the India-UK FTA and explore its potential impact on various sectors.
Key Provisions of the India-UK FTA
The India-UK FTA is a comprehensive agreement that covers a wide range of sectors, including trade in goods, services, and investment. The agreement has been designed to remove tariffs and other trade barriers, making it easier for businesses to trade between the two countries. Here are some of the key provisions of the agreement:
- Tariff Reductions: The agreement provides for significant tariff reductions on a wide range of products. India will cut import tariffs on UK’s whisky from 150% to 75% and then to 40% by the 10th year of the deal. This will make UK whisky more competitive in the Indian market, which is one of the fastest-growing spirits markets in the world.
- Zero Tariffs on 99% of Indian Exports: The UK will set zero tariffs on 99% of Indian exports, which will boost trade in sectors such as textiles, jewellery, and other products. This will provide a significant boost to Indian exporters, who will be able to access the UK market without facing any tariffs.
- Simplification of Trade Procedures: The agreement aims to simplify trade procedures by reducing the paperwork and bureaucracy required for imports and exports. This will make it easier for businesses to trade between the two countries and reduce the time and cost associated with international trade.
- Increased Market Access: The agreement provides for increased market access in sectors such as agriculture, manufacturing, and services. This will enable Indian businesses to access the UK market and UK businesses to access the Indian market, leading to increased trade and investment.
- Protection of Intellectual Property: The agreement includes provisions to protect intellectual property rights, including patents, trademarks, and copyright. This will provide a level playing field for businesses and ensure that they are protected from intellectual property theft.
Impact of the India-UK FTA
The India-UK FTA is expected to have a significant impact on various sectors, including:
- Textiles and Apparel: The agreement will provide a boost to the Indian textile and apparel sector, which is one of the country’s largest employers. Indian exporters will be able to access the UK market without facing any tariffs, making their products more competitive.
- Jewellery and Gems: The agreement will provide a boost to the Indian jewellery and gems sector, which is known for its high-quality products. Indian exporters will be able to access the UK market without facing any tariffs, making their products more competitive.
- Whisky and Spirits: The agreement will provide a boost to the UK whisky industry, which will benefit from the reduction in tariffs on Indian imports. Indian whisky producers will also benefit from the increased market access in the UK.
- Automotive Sector: The agreement will provide a boost to the automotive sector, which is an important industry in both India and the UK. Indian and UK companies will be able to collaborate on research and development, leading to the development of new technologies and products.
Conclusion
The India-UK FTA is a significant agreement that will boost bilateral trade between the two nations. The agreement provides for significant tariff reductions, simplification of trade procedures, and increased market access. The agreement will have a positive impact on various sectors, including textiles, jewellery, whisky, and the automotive sector. As the agreement comes into effect, businesses in both countries can expect to see increased trade and investment, leading to economic growth and job creation.
Source:
https://www.reuters.com/world/uk/whats-uk-india-trade-deal-2025-05-06/
Note: The article is based on the news article provided and does not contain any personal opinions or biases. The article is intended to provide a factual summary of the key provisions of the India-UK FTA and its potential impact on various sectors.
