London: The British Department for Business and Trade announced on Tuesday that the UK and India have agreed on a trade deal that will catalyze trade and investment between the two countries. The deal includes reductions in tariffs, provisions on the services sector, and procurement allowing British firms to compete for more contracts.
According to Kuwait News Agency, the government emphasized the benefit to economic growth and job creation from UK firms expanding exports to India. The deal includes a three-year exemption on the social security paid by Indian employees working in the UK on short-term visas. This agreement comes after three years of on-off negotiations.
British Prime Minister Sir Keir Starmer described it as a "landmark deal" which would boost growth and "deliver for British people and business". Once it comes into force, which could take up to a year, UK consumers are likely to benefit from the reduction in tariffs on goods coming into the country from India, including clothing, footwear, foodstuffs, jewelry, and gems.
On the other hand, UK exports that will see levies fall include aerospace, electrical and medical devices, spiritual drinks, cosmetics, as well as UK food products such as lamb, salmon, chocolates, and biscuits. The British government said the deal was the "biggest and most economically significant" bilateral trade agreement the UK had signed since leaving the European Union in 2020.
Last year, trade between the UK and India totaled £41 billion and was already forecast to grow, but the government said the deal would boost that trade by an additional £25.5 billion a year by 2040. India is forecast to become the world's third-largest economy in a few years. The UK is also a high-priority trading partner for Prime Minister Modi's government, which has an ambitious target to grow exports by $1 trillion by 2030.
The Prime Minister spoke to the Prime Minister of India, Narendra Modi, today, the PM Office statement said. The leaders began by celebrating the landmark UK-India Free Trade Agreement announced today, a deal which will add billions to the UK economy, boost wages, and deliver on this government's Plan for Change.
In a huge economic win for the UK, delivering for working people and British businesses, the Prime Minister underscored the need to go further and faster to get things done, to secure and renew the country. Through pragmatism and purpose, the leaders noted that this historic deal is the biggest the UK has done since leaving the EU and the most ambitious India has ever done.
Turning to the terrorist attack in Jammu and Kashmir last month, the Prime Minister reiterated his deep condolences at the tragic and senseless loss of life. Finally, Prime Minister Modi extended an invitation to India, which the Prime Minister was pleased to accept and said he looked forward to visiting India at the earliest opportunity.