India-UK Free Trade Agreement Set to Launch on July 15, UK Envoy Describes It as a ‘Historic Moment’
India and the UK have confirmed that their free trade agreement (FTA) will take effect on July 15. This agreement aims to facilitate tariff reductions, enhance market access, and strengthen economic cooperation between the two nations. The announcement follows the signing of the trade pact last year, which the UK government describes as the most comprehensive trade agreement India has implemented to date.
Businesses in both countries now have 28 days to prepare for the agreement’s implementation. UK High Commissioner to India, Lindy Cameron, emphasized the significance of this moment, stating it marks a new era of growth for both economies.
The FTA is projected to increase bilateral trade by £25.5 billion annually in the long term. It is also expected to contribute £4.8 billion to the UK’s GDP and raise real wages by £2.2 billion. The agreement includes substantial tariff reductions on various products. For instance, tariffs on British whisky exports to India will decrease from 150% to 40%, while automobile duties will drop from 100% to 10% under a quota mechanism. Tariffs on cosmetics will either be eliminated immediately or phased out over the next decade.
In return, the UK will lower tariffs on several Indian exports, including clothing, footwear, and selected food products. The British government anticipates that reduced import costs will lead to greater product choices and potentially lower prices for consumers. UK Business and Trade Secretary Peter Kyle urged companies to prepare for the agreement’s implementation, highlighting that the trade deal aims to deliver immediate benefits, including £400 million in tariff cuts within the first year.
To take advantage of the tariff concessions, businesses must complete registration requirements with HM Revenue and Customs (HMRC) before the agreement takes effect. Additionally, the UK-India Double Contributions Convention Agreement will also come into force on July 15. This arrangement allows UK nationals working in India and Indian professionals in the UK to contribute to their home country’s social security system for up to 60 months without making parallel contributions in the host country. The UK has similar social security agreements with countries like Japan, South Korea, and Canada.
The FTA’s implementation follows extensive negotiations and technical preparations by both governments, aiming to boost trade and investment flows between the two economies.
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