Cabinet Approves India-UK Free Trade Agreement
The Union Cabinet has approved a comprehensive free trade agreement (FTA) with the United Kingdom, set to be signed in London on July 24. This landmark pact, India's most ambitious to date, aims to double bilateral trade to $120 billion by 2030. It proposes removing tariffs on key exports like leather and textiles while making UK imports such as cars and whisky cheaper. The agreement also covers critical areas including services, investment, intellectual property rights, and government procurement.
Unpacked:
Indian sectors such as textiles, leather, and services are expected to benefit the most, as the FTA removes tariffs on key exports and opens up opportunities worth billions, particularly for ready-made garments and home textiles. The agreement is also anticipated to create significant job opportunities in these labor-intensive industries.
Tariffs on UK cars exported to India will drop from over 100% to 10%, while duties on whisky will fall from 150% to 75% immediately, eventually reducing to 40% over ten years. Other UK exports like cosmetics and machinery will also see substantial tariff reductions.
The FTA is projected to double bilateral trade to $120 billion by 2030. It could boost the UK’s GDP by £4.8 billion annually and increase wages by £2.2 billion, while India is expected to see increased investment, job creation, and expanded export opportunities.
While the FTA is widely celebrated, concerns have been raised about the pace of tariff reductions for sensitive sectors, potential impacts on domestic industries, and challenges in implementing intellectual property and procurement provisions. Some stakeholders worry about increased competition for local businesses.