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AI Generated Summary
- For India, it’s a big win for IT professionals, entrepreneurs, and young job seekers, while for the UK, it opens the door to one of the world’s fastest-growing consumer markets.
- On Thursday, India and the United Kingdom signed and formalised a long-awaited Free Trade Agreement (FTA) during Indian Prime Minister Narendra Modi’s visit to the UK, where he met British Prime Minister Keir Starmer.
- The India-UK FTA is not just a trade pact – it’s a strategic partnership that will create jobs, boost investments, and make goods cheaper in both countries.
On Thursday, India and the United Kingdom signed and formalised a long-awaited Free Trade Agreement (FTA) during Indian Prime Minister Narendra Modi’s visit to the UK, where he met British Prime Minister Keir Starmer. The agreement, signed by India’s Commerce Minister Piyush Goyal and UK Trade Secretary Jonathan Reynold, comes after three years of negotiations and is expected to boost bilateral trade by $34 billion annually.
Why the FTA Matters
- For India: It opens up new growth opportunities, promotes skill development, and generates employment across multiple sectors, particularly for young professionals and entrepreneurs.
- For the UK: It strengthens trade ties with one of the fastest-growing major economies, creates jobs, and makes consumer goods cheaper.
Key Benefits for India
1. Cheaper Imports from the UK
- Medical devices, aerospace parts, and other high-tech imports will now be more affordable.
- Tariffs on British consumer products like soft drinks, cosmetics, chocolates, biscuits, lamb, salmon, and cars will drop from 15% to 3%.
- Electric vehicles (EVs): Tariffs cut from 110% to 10% (within a quota).
- Whisky imports: Duty reduced from 150% to 75% immediately, and further to 40% over 10 years.
2. Boost for Indian Professionals
- Easier access to the UK job market: Indians can now work in 36 UK service sectors without an Economic Needs Test.
- IT & tech professionals: More than 60,000 Indian IT workers (from firms like TCS, Infosys, Tech Mahindra, HCL, Wipro) stand to benefit annually.
- Work permits: Indians can work in 35 UK sectors for 2 years even without an office in the country.
- Social security exemption: Indians will not have to pay UK social security contributions for 3 years.
- Creative & cultural professionals: Chefs, yoga teachers, musicians, and freelancers will find it easier to work in the UK.
3. Opportunities for Entrepreneurs
- The agreement supports young Indian entrepreneurs and graduates by making it easier to set up or collaborate with UK firms.
Key Benefits for the UK
1. Major Tariff Reductions
- India will reduce tariffs on 90% of British goods, with 85% becoming tariff-free within 10 years.
2. Public Procurement Access
- UK businesses can now bid for non-sensitive Indian government tenders above ₹2 billion – potentially 40,000 tenders annually, worth around ₹4.09 lakh crore.
3. Job Creation & Wage Growth
- The deal is expected to create over 2,200 jobs in the UK and raise wages by £2.2 billion annually.
4. Cheaper Goods for Consumers
- British consumers will enjoy lower prices and more variety on clothes, shoes, and food products.
5. Stronger Business Ties
- Already, 26 British companies have announced new business ventures in India.
What Leaders Said
- PM Keir Starmer: “Our landmark trade deal with India is a major win for Britain. It will create thousands of British jobs, unlock new opportunities for businesses, and drive growth in every corner of the country.”
- PM Modi (implicitly through the agreement): India views the deal as a step towards economic growth, job creation, and stronger global trade partnerships.
Bottom Line
The India-UK FTA is not just a trade pact – it’s a strategic partnership that will create jobs, boost investments, and make goods cheaper in both countries. For India, it’s a big win for IT professionals, entrepreneurs, and young job seekers, while for the UK, it opens the door to one of the world’s fastest-growing consumer markets.
