Blitz Bureau
NEW DELHI: In a landmark moment for bilateral relations, India and the United Kingdom formally signed a sweeping Free Trade Agreement on May 6, heralding what both nations described as a “transformative” step towards deeper economic and strategic alignment.
After more than three years of negotiations, the deal is being celebrated as the most comprehensive trade accord in India’s history and the most economically significant bilateral agreement the UK has secured since Brexit.
Accompanying the FTA is a pivotal Double Contribution Convention (DCC), exempting Indian professionals on short-term UK assignments from dual social security contributions for three years.
Ambitious goals
The deal aims to double bilateral trade and push annual volumes past $100 billion by 2030. Economic modelling suggests the agreement could boost combined trade by £25.5 billion by 2040. The UK expects annual GDP gains of £4.8 billion and wage increases worth £2.2 billion, while India anticipates strong export-led growth and expanded access to British markets and capital.
For India, the FTA offers near-complete tariff elimination on 99 per cent of its exports to the UK. Labour-intensive sectors such as textiles, apparel, footwear, marine products, and handicrafts stand to benefit significantly, with zero-duty access unlocking new growth potential.
Major mutual gains India’s services sector also sees meaningful progress. The FTA simplifies procedures for skilled professionals in sectors such as IT, design, and culinary arts, although visa quotas remain modest.
The DCC, long sought by Indian businesses, is seen as a breakthrough. It eliminates the financial burden of double social security contributions for Indian workers temporarily based in the UK. On the UK side, the FTA grants preferential access to 90 per cent of Indian tariff lines, with 85 per cent of these becoming duty-free within a decade.
Among the most notable wins: Scotch whisky and British gin, whose tariffs will fall from 150 per cent to 75 per cent immediately, and then reduce further to 40 per cent over the next ten years. The UK’s automotive industry gains as well, with Indian tariffs on vehicle imports dropping to 10 per cent. Medical devices, cosmetics, aerospace components, and food products are also covered under the new access regime.
Digital, tech tie-ups
The agreement also sets a new benchmark for digital and technology collaboration. It includes provisions for paperless trading, electronic contracts, and secure cross-border data flow. These measures open doors for UK firms in fintech, telecom, e-commerce, and digital services, while paving the way for regulatory convergence in the digital economy.
On intellectual property, the FTA mandates copyright protection for at least 60 years and mutual recognition of Geographical Indications (GIs) for products like Scotch whisky and Darjeeling tea.
