Prime Minister Narendra Modi and his UK counterpart Sir Keir Starmer on Tuesday announced the successful conclusion of a mutually beneficial India-UK Free Trade Agreement (FTA).
The deal was sealed after PM Modi spoke to PM Starmet over the phone. Apart from the FTA, a Double Contribution Convention has also been signed to take care of the interests of Indian workers in the UK.
“These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon,” PM Modi said on X.
Under the free trade agreement, 99 per cent of Indian exports to the UK will get the benefit of zero duty, according to an official statement. The agreement opens up massive export opportunities for labour-intensive sectors such as textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery, and other important sectors such as engineering goods, auto parts and engines, and organic chemicals, the statement said.
There will also be a significant boost to trade in services, such as IT/ITeS, financial services, professional services, other business services and educational services.
In an unprecedented achievement, India has secured an exemption for Indian workers who are temporarily in the UK and their employers from paying social security contributions in the UK for a period of three years under the Double Contribution Convention. This will make Indian service providers significantly more competitive in the UK, the statement explained.
This will ensure stronger strategic alignment and greater global mobility for aspirational young Indians, it added. Union Minister for Commerce and Industry Piyush Goyal thanked the Prime Minister for his guidance and encouragement, which made the trade deal possible, and under whose visionary leadership India is looked upon as “Vishwa Mitra – Trusted Partner” of the world.
“This Agreement sets a new benchmark for equitable and ambitious trade between two large economies. It will benefit Indian farmers, fishermen, workers, MSMEs, startups and innovators. It brings us closer to our goal of becoming a global economic powerhouse.
This FTA is not only about goods and services, but also about people, possibilities and prosperity. It protects our core interests while opening doors to India’s greater participation in global value chains,” he said.
This forward-looking Agreement is aligned with India’s vision of Viksit Bharat 2047 and complements the growth aspirations of both the countries, the statement said.