India-UK FTA to Come into Effect from July 15
Under the deal, the tariff on whisky imported into India will be reduced from 150% to just 40%. It is expected that the bilateral trade between the two countries will increase by 25.5 billion pounds per year in the long term.
Both countries have described this FTA as a major milestone for their economic relations. The UK government has given businesses 28 days to prepare for the implementation of the agreement.
According to British estimates, the deal will add 4.8 billion pounds to the UK economy and increase real wages by 2.2 billion pounds. London has called this the most comprehensive trade deal India has signed so far.
### What will become cheaper?
The biggest beneficiary will be the British Scotch whisky industry. India has agreed to cut the import duty on whisky from 150% to 40%. Tariffs on automobiles will also be reduced from 100% to 10% under a quota system. Tariffs of up to 22% on beauty products and several other items will either be eliminated immediately or phased out over 10 years.
On the other hand, Britain will reduce or eliminate tariffs on Indian exports such as textiles, footwear, and certain food products. This will lower prices for consumers and provide more choices.
British Secretary of State for Trade and Commerce Peter Kyle said that the government wants businesses and the public to benefit as soon as possible from this historic trade deal.
### PM Modi’s reaction
Prime Minister Narendra Modi also welcomed the agreement on social media platform X, calling it a historic achievement for India-UK relations. He said that the trade deal will significantly boost bilateral trade and investment, create opportunities for farmers, workers, MSMEs and startups, and contribute to the goal of Viksit Bharat 2047.
