Wednesday, July 23, 2025

India-UK FTA: Free trade agreement will be done between India-Britain on Thursday, who will get more benefit? - India UK Sign Historic Free Trade Agreement With Tariff Relief and Export Boost

India-UK FTA: India and Britain (UK) are about to sign a historic free trade agreement (FTA) on Thursday, 25 July. The agreement is expected to open billions of dollars of trade and investment opportunities between the two countries.

This agreement will be done during Prime Minister Narendra Modi during Britain. This is his fourth visit to Britain after taking over in 2014. PM Modi will hold talks with his British Prime Minister Kir Stmper (Keir Starmer) here on several issues and then will leave for Maldives on 25 July.

What is India-Britain FTA?

The Indo-Bitten Free Trade Agreement is a much awaited trade agreement. It started in January 2022 during the tenure of the then British PM Boris Johnson. It was targeted to be completed by Diwali by 2024, but after several delays it could be finalized in May 2025. Prime Minister Modi has called this agreement a ‘historic agreement’.

This is India’s first major FTA in the last ten years and Britain has the fourth such agreement after Breedgit. This includes a total of 26 chapters including trade, investment, intellectual property rights of goods and services. Parallel to this, both countries are also interacting on a bilateral investment treaty (BIT). The agreement is currently waiting for the approval of the UK Parliament and is likely to be implemented in the next one year.

UK's Prime Minister Keir Starmer (L) and India's Prime Minister Narendra Modi talk during a bilateral meeting in the sidelines of the G20 summit at the Museum of Modern Art in Rio de Janeiro, Brazil Brazil, on November 18, 2024. (Photo by Stefan Rousseau / POOL / AFP)

What will be the benefit of India?

The big advantage for India from this FTA will be that about 99% of its goods will get access with zero duty in the UK. Currently, these items are charged from 4% to 16%. This will provide great benefits to areas such as textile, leather, shoes, toys, sea products, gems-jewelery, auto components and electric vehicles.

Another relief will be found as a social security agreement. Now Indian workers will not have to contribute social security in Britain for three years. This will save companies and workers about ₹ 4,000 crore annually. Indian chefs, yoga instructors, musicians and other professionals will also get temporary visa access in Britain. This will promote the service sector.

Britain is already India’s sixth largest foreign investor, which has so far invested $ 36 billion. FTA expects new investment in areas such as manufacturing, automobile and electric mobility. Companies like Welspon India, Arvind Limited, Relaxo, Tata Motors, Mahindra Electric and Bharat Forge will directly benefit.

What will be the benefit of Britain?

Britain will also get widespread benefits from this agreement. The fee charged in India on 90% of its goods will be abolished. Scotch whiskey and which will be reduced to 75% and then up to 40% respectively in 10 years. At the same time, duty on cars will be reduced from 100% to only 10%. Products like cosmetics, chocolate, biscuits, salmon fish and medical devices will also get relief.

Britain’s automobile, aerospace and machinery sector will also benefit greatly. Sales of companies like Jaguar Land Rover, Eston Martin and Diazio may increase in India. Also, UK consumers will find Indian goods cheaper.

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British companies will also get access to Indian government tenders. Now they will be able to bid in non-sensitive tenders worth more than ₹ 2 billion. This will provide access to about 40,000 tenders worth ₹ 4.09 lakh crore annually.

By 2040, this agreement can add $ 6.5 billion to the UK economy. Also, the British export to India can increase by 69% i.e. $ 21 billion.

What is the importance of this agreement?

This agreement is a milestone for both countries. This will give India a strong Western market and strengthen labor-dominated exports. At the same time, Britain will get a chance to deepen relations with a rapidly growing economy. His post-broggit business strategy will also be Mazoot. ,

Indian Foreign Secretary Vikram Egypt has described it as an ‘important agreement’. Commerce Minister Piyush Goyal will be on a visit to Britain with PM Modi to sign the agreement.

India is already moving towards FTA with countries like EFTA, Asean, Australia, America and European Union. In such a situation, the Indo-UK agreement can also become an ideal model for other countries.

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