The UK-India Free Trade Agreement (FTA) is set to revolutionise trade between the two nations, with a projected £4.8 billion boost to UK GDP by 2025, a rise in real wages by £2.2 billion, and a significant increase in bilateral trade of £25.5 billion per annum. The deal's swift implementation, just 28 days after signature, underscores the commitment from both governments to quickly realise the anticipated advantages.
Key UK industries are expected to benefit from considerable tariff reductions, with Scotch whisky tariffs slashed from 150% to 40%, and automotive tariffs decreasing from 100% to 10% under a quota system. Cosmetics will also see tariffs eliminated either immediately or over a ten-year period. Conversely, the UK will reduce tariffs on Indian goods such as clothing, footwear, and certain food products, potentially leading to lower costs for British importers and greater choice for consumers.
Business and Trade Secretary Peter Kyle highlighted the immediate advantages, stating that the deal aims for businesses and the public to feel the benefits quickly, including an estimated £400 million in tariff cuts within the first year alone. He urged British exporters to prepare thoroughly to capitalise on the opportunities presented by India's vast market. A UK-India Roadshow is planned to tour all four nations, promoting the new opportunities the agreement offers.
Beyond trade, the agreement also includes provisions beneficial to UK nationals working in India. The period during which they can build entitlement to a UK State Pension while working abroad will be extended from 36 months to 60 months. During this time, they will continue to pay National Insurance Contributions without also having to pay social security contributions in India. This reciprocal arrangement, applicable to highly skilled professionals on existing visa routes, is facilitated by the UK-India Double Contributions Convention Agreement, which will enter into force on July 15th.
To leverage the new tariff reductions, businesses are required to register with HMRC. The government is encouraging companies to utilise the remaining time before July 15th to complete this registration and ensure they are fully prepared to take advantage of the deal's provisions.