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Times
07-05-2025
- Business
- Times
No better time for a trade deal than start of a profitable war
Narendra Modi, had a very busy day on Tuesday: the Indian prime minister signed a trade deal with the UK and then celebrated by bombing Pakistan. These twin events made for a curious start to prime minister's questions. With his first breath, Keir Starmer urged India to stop bombing Pakistan, and also urged Pakistan to stop bombing India back again. And then, with his second breath, he congratulated himself on his big new trade deal with India. 'The biggest trade deal the UK has delivered since we left the EU,' he said. His MPs cheered, and quite right too. The UK has long been one of the world's leading arms exporters, so there is never a better time to be doing a free trade deal
Times of Oman
07-05-2025
- Business
- Times of Oman
India-UK Free Trade Agreement (FTA) a historic and comprehensive deal
New Delhi: The India-UK Free Trade Agreement (FTA0, signed on Tuesday May 6th 2025, after nearly three years of negotiations, is one of the most comprehensive free trade agreement ever entered into by India. The FTA is likely to set a new benchmark for equitable trade between two major economies. Broadly, the UK-India FTA provides for tariff reductions and market access on various items by both countries. Under the agreement India will reduce import duties on 90 per cent of tariff lines, with 85 per cent of these becoming fully tariff-free within ten years. Under the agreement, almost 99 per cent of Indian exports will receive duty-free access to the UK market, covering nearly the entire trade value between the two countries. UK products such as whisky, gin, cars, cosmetics, medical devices, advanced machinery, and lamb will see significant tariff reductions. For example, tariffs on whisky and gin will be halved from 150 per cent to 75 per cent initially, and further reduced to 40 per cent over next ten years. Tariffs on automotive will be reduced from over 100 per cent to 10 per cent under a specified quota system. The agreement will boost key sectors and opens up bigger export opportunities for India, in sectors like textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery, engineering goods, auto parts, and organic chemicals. Exporters from UK will get easier access to the Indian market for products such as cosmetics, aerospace components, medical equipment, salmon, electrical machinery, soft drinks, chocolate, and biscuits. In services sector, India will get enhanced access to the UK market for its professionals, especially in IT, financial, professional, and educational services sector. The FTA includes provisions for easier movement of skilled workers, including contractual service suppliers, business visitors, investors, intra-corporate transferees, and independent professional. There will be a three-year exemption from social security contributions in the UK for Indian workers and their employers I seen as a great achievement. This will result in significant cost savings and increased competitiveness for Indian service providers. The FTA is projected to contribute USD 6.4 billion annually to the UK economy by 2040, while boosting bilateral trade to over USD 100 billion by 2030. The deal is expected to double bilateral trade from its current value of about USD 60 billion. The FTA also cements the India-UK Comprehensive Strategic Partnership and is seen as a foundation for deeper collaboration in defence, technology, education, and tourism. The agreement also addresses non-tariff barriers, ensuring smooth trade in goods and services and preventing unwarranted restrictions on exports. The deal not only is expected to attract foreign investment but also stimulate domestic manufacturing, and support the integration of both countries into global value chains. From the deal, Indian consumers will benefit from lower prices on UK goods, while British buyers will see reduced prices and more variety in products like apparel, shoes, and food items. The agreement is also seen as a milestone in global trade, and likely to set a benchmark for India's under negotiations FTAs with EU, Australia and New Zealand.
CNA
07-05-2025
- Business
- CNA
India and the UK reach a free trade agreement after three years of negotiations
India and the United Kingdom have reached a free trade agreement following three years of negotiations. British Prime Minister Keir Starmer has hailed it as a 'historic day', but not everyone is happy. Opposition politicians are concerned about some UK industries will now have to compete with cheaper Indian imports. John Bevir reports from the UK.
Bloomberg
06-05-2025
- Business
- Bloomberg
UK, India Seal Trade Deal Amid Fallout of Trump Tariff Wars
By and Joe Mayes Updated on Save Takeaways NEW Supply Lines is a daily newsletter that tracks global trade. . India and the UK agreed to a landmark trade deal slashing tariffs on cosmetics, vehicles, alcoholic beverages and other goods, as both sides look for wins to offset the disruption of President Donald Trump's protectionist policies.
Sky News
06-05-2025
- Business
- Sky News
The devil is in the detail as India and UK sign 'historic' agreement
Why you can trust Sky News India's Prime Minister Narendra Modi has called his country's free trade agreement with the UK "historic" and it will "further deepen" the comprehensive strategic partnership between both countries. The agreement has been in the making since January 2022 and is the culmination of 14 rounds of talks. But we still have to wait for the finer details of the deal. Sir Keir Starmer hailed the "historic day for the United Kingdom and for India". "This is the biggest trade deal that we, the UK, have done since we left the EU," the prime minister said. Benefits to India 's industry were already available, with more than 60% of total Indian merchandise being duty-free into the UK, while the rest attracted low tariffs. The average tariff on goods imported from India into the UK is 4.2%, while the average tariff imposed on UK goods into India is 14.6%. In the case of Scotch whisky, it was 150%, with 100% on cars. When it comes to some of the sticky issues that led to the prolonged negotiations, the picture is less clear. Details of service visas for Indian IT and health workers, business mobility and greater access for its students and professionals in the UK market are still to be deciphered. However, the deal contains a "double contribution convention", which means Indian workers coming to Britain and British workers going to India will not have to pay national insurance contributions in both countries for the first three years. The national insurance exemption was hailed by India as a "huge win" but lambasted by the Conservatives as a giveaway as it makes it cheaper to employ Indians than anybody else in the UK. Conservative shadow trade minister Harriet Baldwin told the Commons: "This government is literally putting up taxes for British workers but cutting them for Indian workers." Just one month ago, UK employers' national insurance was increased to 15% and the threshold at which employers start paying it was reduced from £9,100 to £5,000, meaning it is now more expensive to employ staff. What about Scotch whisky? Though the tariff has been reduced from 150% to 75% on Scotch whisky, has the UK government agreed to making changes in the minimum three-year maturity period to be classified as 'Scotch'? Indian whisky manufacturers have lobbied for a reduction to 12-18 months as beyond that, losses due to evaporation - known as 'angel's share' - would make their products unviable. Thorny issues The 'rules of origin', a provision to help contain the dumping of goods, was another thorny issue. India was adamant that the goods from a third country could not be dumped in its market by just putting a label on it. Over the years, the Indian government has been very sensitive of data being taken out of the country. It has come down heavily on US tech giants to have servers within the country to which many have had to comply. The issue of arbitration has been part of the many rounds of talks. India has proposed to first utilise all local judicial remedies for the settlement of disputes before initiating an international arbitration. The UK wants the ability of its companies to go to international courts directly. The Vodafone lawsuit is still seen as a case of overreach by the Indian government, where the company had to pay millions of dollars in retrospect tax even though it won its arbitration case in a Hong Kong court. Though automotive tariffs have been reduced from 100% to 10% under a quota, there is little clarity on how much India would allow Britain's advanced manufacturing sectors and clean energy industry into its growing market. The protected EV sector in India India ferociously protects its EV (electric vehicle) sector and encourages its domestic industry through production-linked incentive schemes. There is also no mention of 'carbon tax' which the UK wanted to levy, a concern for India as it could restrict the export of metal products. India's labour-intensive sectors like textiles, footwear, gems and jewellery will surely benefit with lower tariffs as it will level the playing field with its competitors in the UK. The bilateral trade between India and the UK increased to $21.34bn in 2023-24 from $20.36bn in 2022-23. Both countries seek to double this in the next 10 years. Free trade agreement talks between India and the UK started on 13 January 2022, and initially progressed fast. But they got stuck over key issues, COVID and general elections in both countries. India has signed limited agreements with Mauritius, the UAE and Australia, this one being the most comprehensive of them all. It is actively negotiating a bilateral trade agreement with America, its largest trading partner. President Donald Trump had levied a 26% reciprocal tariff which is currently on hold.
