New Delhi, May 6 (IANS) 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.
Key Highlights of the India-UK FTA are:
— The FTA with the UK is a modern, comprehensive and landmark agreement which seeks to achieve deep economic integration along with trade liberalisation and tariff concessions.
— The FTA ensures comprehensive market access for goods across all sectors, covering all of India’s export interests. India will gain from tariff elimination on about 99 per cent of the tariff lines, covering almost 100 per cent of the trade value, offering huge opportunities for an increase in the bilateral trade between India and the UK.
— The FTA provides positive impact on manufacturing across labour and technology intensive sectors and opens up export opportunities for 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. This will substantially improve Indian goods competitiveness in the UK vis-a-vis other countries.
— The FTA will have significant positive gains for employment in India.
— India will benefit from one of the most ambitious FTA commitments from the UK in Services such as IT/ITeS, financial services, professional services, other business services and educational services, opening up new opportunities and jobs.
— The FTA eases mobility for professionals, including contractual service suppliers, business visitors, investors, intra-corporate transferees, partners and dependent children of intra-corporate transferees with the right to work, and independent professionals like yoga instructors, musicians, and chefs.
— Immense opportunities for talented and skilled Indian youth will open up in the UK, which is a major global centre for digitally delivered services due to its strong financial and professional services sectors and advanced digital infrastructure.
— India has secured significant commitments on digitally delivered services for Indian service suppliers, especially in professional services such as architecture and engineering, computer-related services and telecommunication services.
— The 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 will lead to significant financial gains for the Indian service providers and enhance their competitiveness in the UK market that would create new job opportunities as well as benefit large number of Indians working in the UK.
— India has ensured that non-tariff barriers are suitably addressed to ensure the free flow of goods and services and that they do not create unjustified restrictions to India’s exports.
— The FTA seeks to promote good regulatory practices and enhance transparency that are in sync with India’s own focus on domestic reforms to enhance the ease of doing business.
Commerce Secretary Sunil Barthwal emphasised that this FTA is a game changer and will set India further on the path of rapid economic growth and benefit India’s global integration. This is the most comprehensive free trade deal ever entered into by India and will be the gold standard for our future engagements, he said.
The FTA takes place against the backdrop of growing economic relations between India and the UK, as exemplified in the bilateral trade of about $60 billion, which is projected to double by 2030.
–IANS
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