‘These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies,’ PM Modi saidread moreIndia and the United Kingdom finalised a landmark bilateral free trade agreement (FTA) on Tuesday (May 6).Prime Minister Narendra Modi announced the completion of the deal in a post on social media platform X (formerly Twitter).“These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies.”STORY CONTINUES BELOW THIS ADUK PM Starmer made a similar announcement on X.What gets cheaper with the FTA?An FTA is an arrangement where countries agree either to completely remove or significantly lower customs duties on the maximum number of goods traded between them. It also leads to shedding of non-trade barriers on a substantial value of imports from partner countries.The India-UK FTA lowers tariffs on products like whisky, cosmetics, advanced manufacturing parts, and food items such as lamb, salmon, chocolates, and biscuits, making them
cheaper. Tariffs on medical devices will also be slashed. The deal also mentions to quotas on both sides for autos imports.Easing norms to promote services exports and bilateral investments also comes under the purview of FTA.STORY CONTINUES BELOW THIS ADDouble Contribution Convention and what it meansThe deal also includes a Double Contribution Convention (DCC). This is a bilateral arrangement between two countries designed to protect the social security rights of workers who move between them.When a DCC is not in place, Indian professionals working in the UK (and vice versa) might be required to pay certain taxes in both countries. With the convention, contributions made in one country can count toward eligibility for benefits (such as pensions) in the other country. This ensures that workers don’t lose out on their retirement benefits just because they’ve moved.Long road to the FTAThe deal between the world’s fifth and sixth largest economies has been finalised after three years of intermittent negotiations. It aims to boost bilateral trade by an additional £25.5 billion ($34 billion) by 2040, with the intention of liberalising market access and reducing trade restrictions.READ MORE: The historic India-UK trade deal in 10 numbersDiscussions regarding a free trade agreement between India and Britain began in January 2022. This deal became a representation of Britain’s aspirations for an independent trade policy following its departure from the European Union.However, the negotiations have faced interruptions, as Britain has had four different prime ministers since those talks started, and both countries held elections last year.With inputs from agenciesTagsGlobal economyIndiaIndian EconomyKeir StarmerNarendra ModiUnited KingdomEnd of Article
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India, UK ink landmark free trade agreement concluding years of negotiations, PM Modi announces
