India and the United Kingdom signed a major Free Trade Agreement (FTA) on Thursday. Prime Minister Narendra Modi visited the UK and met his counterpart Keir Starmer. Both leaders were present at the signing ceremony.

Commerce Minister Piyush Goyal and UK’s Trade Secretary Jonathan Reynolds signed the deal, marking a new era in India-UK economic relations.

Trade deal finalised after three years

India and the UK spent nearly three years negotiating this agreement. Now, the FTA is expected to boost annual trade between the two countries by about $34 billion.

Huge benefits for Indian exports

The agreement will bring duty-free access to nearly 99% of Indian exports. This will help Indian businesses grow faster, especially in sectors like textiles, leather, footwear, and jewellery.

Commerce Minister Piyush Goyal said the FTA would open “nearly $23 billion in opportunities for labour-intensive sectors, marking a new era for inclusive and gender-equitable growth.”

What gets cheaper for Indians

Medical devices and aerospace parts: Indian industries and consumers will now get British-made items like medical equipment and aerospace parts at lower prices.

Soft drinks, cosmetics, and cars: After the FTA takes effect, India’s average tariff on UK goods will fall from 15% to just 3%. This will make British products like soft drinks, cosmetics, and cars more affordable for Indian buyers.

Scotch whisky to become cheaper

British whisky will also enter the Indian market at a much lower cost. Tariffs on Scotch will drop from 150% to 75% immediately, and then gradually reduce to 40% over ten years.

Nik Jhangiani, Interim Chief Executive of Diageo, said, “This agreement marks a great moment for both Scotch and Scotland, and we’ll be raising a glass of Johnnie Walker to all those who have worked so hard to get it secured.”

Chocolates, salmon, and biscuits also included

India will also cut duties on other UK products like chocolates, biscuits, and salmon, making them more accessible to Indian consumers.

Easier for Indians to live and work in the UK

The FTA also opens new paths for Indian professionals and businesses:

• Indian firms and freelancers will get access to 36 service sectors in the UK without needing an ‘Economic Needs Test’.

• Indian professionals can work in 35 UK sectors for up to 24 months, even without having an office in the UK.

• Indian workers will also be exempt from UK social security payments for three years under the agreement.