Dr Mohan Kaul
THE India-UK free trade agreement (FTA), inked in London on July 24 in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer, could be a game changer amidst global trade shifts. Commerce and Industry Minister Piyush Goyal was also present.
Seeking to double bilateral trade to $120 billion by 2030 by eliminating or significantly reducing customs tariffs on a wide range of products, it is the UK’s most cherish deal since Brexit and India’s most significant pact with a western economy in over a decade. As PM Modi said on the occasion, “It signals India’s willingness to integrate with the global, but it also demonstrates its resolve to do it only its own terms”.
The messaging is timely as India negotiates tough bilateral trade deals with the US, Oman, the European Union (EU), Peru, and Israel. The latest FTA is extremely detailed – comprising 26 chapters on goods, services, investment, and intellectual property rights. The signing of the FTA was the culmination of three-year-long negotiations, a process that started in the year 2022 and saw both countries iron out significant differences to achieve a mutually beneficial deal. India will benefit from a zero-duty regime for crucial labour-intensive exports such as textiles, leather goods, and footwear, while the UK will see tariff reductions on luxury items such as Scotch whisky and premium cars. In more than one way, it is a win-win situation for both the countries.
