India -UK FTA PAVES WAY for 25.5 billion pounds in Boost: SBI report

India and the United Kingdom have concluded the announced free trade agreement (FTA), as the customs tariff has reduced over 90 % of goods and a distinction on a great re -calibration of bilateral economic relations in the post -Britain exit from the European Union and post -isolation.

India and the United Kingdom reached the FTA on Tuesday, which put an end to nearly three years of negotiations. The agreement, signed by the fifth and sixth largest economy in the world, is especially important given the current World Trade Climate affected by the definitions imposed by US President Donald Trump in early April.

According to the SBI research report, the Free Trade Trade Agreement is expected to enhance 25.5 billion pounds, and contribute 4.8 billion pounds in the GDP in the United Kingdom, and enhance annual wages in the United Kingdom by 2.2 billion pounds. For India, the deal provides expanded access to the UK market in dense labor sectors such as textiles, games, marine products, car components and engineering commodities. It also opens opportunities in the main service fields such as IT, financial services, education and professional services.

The total merchandise trade in India – UK 21.3 billion dollars in the fiscal year 25, as India’s exports increased to 12.9 billion dollars, while imports decreased by 6.1 % to 8.4 billion dollars, which led to a commercial surplus of more than $ 4.5 billion.

One of the main elements in the Free Trade Agreement is to facilitate selective professional movement – from 1,800 to 2000 annual indications of Indian, musicians and yoga professionals. However, controversial issues such as the broader immigration policy and short -term work visas for Indian students have been left outside the agreement.

The Free Trade Agreement also includes provisions for digital commercial facilitation, green commodities, and mutual social security contributions to temporary workers and the United Kingdom, their access to Indian government purchases as a second -class supplier. In addition, India has retained the right to reconsider concessions if the mechanism of adjusting the proposed carbon borders in the United Kingdom (CBAM) – organized for 2027 – affects Indian exports.

The agreement, which both governments expect to be signed in the coming months, confirms the advanced trade strategy in India. There are negotiations with the European Union, Australia, Peru, Sri Lanka and Oman are also ongoing, as well as current agreements with South Korea and ASEAN.

What is changing with the free trade agreement

The Free Trade Agreement in India is not seen only to a transaction agreement, but as a strategy that moves away from excessive dependence on Chinese supply chains and exceeds the increasing American protectionism – with both countries as cooperative players in a multi -sensor global economy.

According to a Reuters report, the customs tariff for whiskeys and jinn is scheduled to decrease significantly under a new trade deal. Begin initially from 150 %, these definitions will be reduced to half to 75 % before they eventually decrease to 40 % during a ten -year period. This step is expected to benefit greatly from the Scottish whiskey industry in Britain, in addition to the decrease in consumer prices in the largest whiskey market in the world.

Moreover, the commercial deal may lead to an expansion of Indian consumer options as a variety of goods will now be included. This expansion extends to clothing and jewelry manufacturers who will now be able to reach the UK market, which ultimately enhances their profit margins.

In addition, India has committed to reducing the car tariff to 10 % with some shares in place, which is a significant decrease from the current tariff rate of more than 100 %. Various British goods, such as cosmetics, air space products, lamb, medical devices, salmon, electrical machines, soft drinks, chocolate and biscuits, will benefit from low tariffs under this commercial agreement. Moreover, Indian workers may see increasing opportunities to work in some sectors in the UK with the implementation of the higher classes.

The UK agreement with India is ranked third in size, after its deals with Australia and Japan. The United Kingdom has signed trade agreements and agreements in principle with about 70 countries, as well as one with the European Union.