India-UK FTA probably next week

NEW DELHI : In an attempt to boost trade and investment between the two countries, India and the United Kingdom are expected to formally sign a long-awaited Free Trade Agreement (FTA) next week. The agreement is expected to double trade between the two nations to $120 billion by 2030.

After the signing, the FTA will need to be ratified by the British Parliament and approved by India’s Union Cabinet. The implementation is likely to take about a year after the signing.

Once implemented, it is expected to eliminate import taxes on Indian exports such as leather goods, clothing, footwear, toys, marine products and gems and jewellery. It will also make British products like whisky, gin, cars, medical devices, cosmetics, chocolates, and soft drinks more affordable in the Indian market.

The two countries had announced the conclusion of the negotiations on May 6. Alongside the trade pact, the two nations had also concluded a social security agreement, under which Indian professionals working in the UK will be exempt from paying social security contributions for up to three years. The long-standing Indian demand is expected to benefit more than 60,000 IT sector employees and could lead to salary savings of nearly 20 per cent.

The legal review of the final text is currently in progress. “The process of legal scrubbing of the FTA text is going on. It is expected to be signed next week,” a senior official told this newspaper. To safeguard local interests,

India has, however, excluded sensitive agricultural items — such as apples, cheese, and dairy products — from tariff concessions.

Marking the end of over three years of complex discussions, India and the UK had on May 6 announced the conclusion of FTA negotiations. Prime Minister Shri Narendra Modi had described the agreement as a “historic milestone” in India-UK relations.