India-UK FTA Set For July 24 Signing; Zero Tariffs, Worker Relief On Cards
Commerce and Industry Minister Piyush Goyal will accompany Prime Minister Narendra Modi for the signing ceremony, according to official sources.
India and the United Kingdom will formally sign their long-anticipated Free Trade Agreement (FTA) on July 24 during Prime Minister Narendra Modi’s visit to London.
The pact, officially called the Comprehensive Economic and Trade Agreement (CETA), is set to significantly boost trade in goods and services, improve mobility for Indian professionals, and deliver financial relief through a landmark social security exemption.
Commerce and Industry Minister Piyush Goyal will accompany PM Modi for the signing ceremony, according to official sources.
The two countries had announced the conclusion of FTA negotiations on May 6 after more than two years of discussions. However, the full operationalisation of the agreement is expected to take about a year. Once the deal is signed, it will require approval from the British Parliament before it can take effect.
A key win for India is a three-year exemption from social security contributions for Indian professionals temporarily working in the UK and their employers. The exemption, granted under the Double Contribution Convention Agreement, is expected to significantly cut costs for Indian IT and professional service firms and enhance their competitiveness.
The FTA eliminates tariffs on 99% of tariff lines covering nearly all Indian exports to the UK. Sectors like textiles, gems and jewellery, auto parts, toys, and marine products are expected to see immediate benefits. On its part, India will reduce tariffs on 90% of its import lines, with 85% of these becoming fully duty-free within a decade.
Tariffs on UK whisky and gin will fall from 150% to 40% over 10 years, while duties on British cars will reduce to 10% under quotas. Other goods such as medical devices, cosmetics, chocolate, and lamb will also see import duties lowered.
The agreement includes strong provisions on digitally delivered services and mobility for professionals. However, negotiations for a separate bilateral investment treaty (BIT) between India and the UK are still ongoing.
The FTA is projected to raise bilateral trade by £25.5 billion and add £4.8 billion annually to the UK’s GDP in the long run.
