What will India-UK trade deal mean?

India and the UK have agreed to a Free Trade Agreement (FTA), marking a new benchmark for “equitable and ambitious trade”.

• The agreement is expected to be signed after three months and will take over a year to implement.

• The UK is India’s 16th largest trading partner and India’s 11th largest partner. Their bilateral trade is about $60 billion, with India’s positive trade balance expected to double by 2030.

• The new trade deal is expected to increase bilateral trade by another $34 billion.

• The British government estimates that $534 million worth in tariffs would be saved when the deal is enforced.

• India expects to benefit from tariffs being eliminated on 99% of its export product categories, increasing export opportunities for sectors such as textiles, leather, footwear, auto parts, engineering, gems and jewellery.

• The UK has secured an exemption for Indian workers temporarily in the UK and for their employers from paying social security contributions for three years under the Double Contribution Convention.

• The Indian automobile industry believes the FTA will ensure the U.K. has better access to India’s premium (vehicle) segment markets.

• Concerns are raised in agriculture and MSMEs due to potential impact on agriculture and MSMEs.

• The FTA could lead to a growing import dependency and the U.K.’s Carbon Border Adjustment Mechanism (CBAM), which would impose a “carbon price” on goods bearing greenhouses being imported into the country.