In a transformative move early this May, India and the United Kingdom finalised a landmark and long-anticipated Free Trade Agreement (FTA), signalling a major stride towards a more balanced and robust economic relationship. The agreement, long in the making, represents more than a trade pact — it’s a blueprint for deeper integration into the global economy, streamlined business operations, and amplified bilateral cooperation.

The FTA reflects India’s broader strategic ambition: to ascend as a $3 trillion economy. It does so by focusing on key reforms such as faster customs processing, reduction in technical trade barriers, and the facilitation of digital and paperless trade—all designed to improve ease of doing business and increase transparency.

One of the agreement’s most immediate and impactful provisions is the elimination of tariffs. The UK will remove tariffs on 99 per cent of Indian tariff lines, effectively granting nearly all Indian exports duty-free access. This is a game-changer for India’s manufacturing-heavy and labour-intensive sectors.

India, in turn, has agreed to gradually reduce tariffs on 90 per cent of UK tariff lines, with 85 per cent becoming completely tariff-free within the next decade. Such synchronised liberalisation is expected to benefit exporters and consumers alike, reducing costs and increasing the availability of goods in both markets.

India will enjoy zero-duty access for its exports to the UK across a range of strategic industrial goods. These include leather, footwear, apparel, gems and jewellery, base metals, machinery, auto components, chemicals, furniture, and sports goods. These sectors, many of which have previously faced tariffs ranging from 4 to 16 per cent, now gain a competitive edge over countries like China, Vietnam, and even Bangladesh (which previously enjoyed duty-free benefits under LDC schemes).

Particularly notable is the textile and apparel sector. From a 2023 export base of $1.2 billion (comprising 6 per cent of the UK market share), Indian........

© News18