India-UK Free Trade Agreement Celebrated as a Catalyst for Economic Growth and Job Creation

Business leaders and industry groups in the India-UK corridor are celebrating a historic Free Trade Agreement (FTA) announced by Prime Ministers Narendra Modi and Keir Starmer. This agreement, hailed as a "landmark" in bilateral relations, is anticipated to enhance job creation and economic growth for both nations. The India Global Forum (IGF), a UK-based policy platform, described the agreement as a "significant milestone" after three years of negotiations.

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The Confederation of Indian Industry (CII) views the FTA as a "transformative accord" that underscores a mutual commitment to strengthening economic ties. It aims to boost technology collaboration, diversify global supply chains, and create a more business-friendly environment. CII President Sanjiv Puri stated that the agreement aligns with the 2030 Roadmap, steering bilateral trade towards an ambitious USD 100 billion target by 2030.

Economic Growth and Strategic Partnership

Lord Karan Bilimoria, Chair of the International Chamber of Commerce (ICC) UK, expressed his delight over the deal, seeing it as a catalyst for doubling trade to over £80 billion within five years. He noted that this is the most significant FTA signed by the UK since Brexit. Bilimoria highlighted India's status as the fastest-growing major economy and its potential to become a key trade partner for Britain.

The UK-India Business Council (UKIBC) emphasised that the agreement will lower trade barriers, promote sustainability, and foster innovation. UKIBC Chair Richard Heald remarked that it will unlock new opportunities across sectors such as technology, manufacturing, services, education, and healthcare. This is expected to drive economic growth and job creation in both countries.

Sectoral Opportunities and Market Access

The City of London Corporation praised the FTA as a significant advancement in London's partnership with one of the world's leading economies. Lord Mayor of London Alastair King highlighted that this agreement will open doors for collaboration in innovation, green finance, and professional services. These areas are where London excels globally, promising shared prosperity for both nations.

According to officials, this FTA is India's most comprehensive yet, covering 26 chapters including new areas like gender rights and small and medium enterprises (SMEs). It aims for deeper economic integration by providing Indian businesses competitive market access in sectors like textiles, leather, footwear, sports goods, gems, jewellery, engineering goods, auto parts, and engines.

Long-term Economic Impact

The UK's Department for Business and Trade (DBT) estimates that the FTA will add an extra £25.5 billion annually to the current two-way trade of £41 billion in the long term. Notable benefits include reduced Scotch whisky tariffs from 150% to eventually 40%, alongside automotive quotas. Officials describe this agreement as a "win-win," offering Indian consumers quality goods at competitive prices while giving UK businesses access to India's vast market.

Prime Ministers Modi and Starmer marked the conclusion of FTA negotiations which resumed in February after an election pause last year. The formal signing is expected during an upcoming visit by the British Prime Minister to India. This deal promises enhanced bilateral investment flows and technology sharing between both economies.

With inputs from PTI