India-UK FTA Ushers in New Era of Trade: FM Nirmala Sitharaman
In a milestone achievement, India and the United Kingdom have been able to sign a full-scale Free Trade Agreement (FTA) in a transformative move in bilateral economic ties. Finance Minister Nirmala Sitharaman called the agreement a precursor to a new age in trade between the two countries and said that 99 percent of Indian exports now have zero-duty access under the agreement.
Announced by Prime Minister Narendra Modi and UK Prime Minister Sir Keir Starmer jointly on Tuesday, the FTA will go a long way in increasing trade, innovation, and employment while promoting a deeper strategic partnership. The agreement is likely to benefit a broad spectrum of sectors ranging from goods, services, and technology.
"This agreement will entail greater access for Indian exporters into markets. Industry and innovation will be able to flourish", said FM Sitharaman on the post-X(formerlyTwitter) posting regarding the mention of the country's potential under Modi's rule.
In an address during the 'NEXT Milan Forum' held in Italy's Bocconi University, she outlined that the increasing importance of bilateral arrangements comes during this present epoch compared to how the market existed earlier dominated by multilateral trading arrangements.
The FTA comes at a time when India-UK bilateral trade stands at around $60 billion, with projections to double by 2030. The pact ensures tariff elimination on nearly 99 percent of tariff lines, covering almost the entirety of trade value between the two nations. This move is expected to provide a major boost to Indian exports across various sectors and encourage sustainable and inclusive economic growth.
In a big victory for India's services sector, the UK has made one of its most ambitious pledges under any FTA. The industry segments that are likely to gain include IT and ITeS, financial services, professional and business services, and education services. This should open up fresh employment opportunities and further boost India's global competitiveness.
In addition, Indian professionals in the UK will be given a specific provision under the Double Contribution Convention. The provisions of the agreement exclude Indian workers and their employers from UK social security contributions for three years, providing significant financial benefits and enhanced competitiveness to Indian service providers.
The FTA also takes care of non-tariff barriers to ensure a free flow of goods and services, keeping Indian exports from arbitrary restrictions. With this bilateral pact, India and the UK reaffirm their intent to build strong supply chains and push economic growth through mutual collaboration.
