Thursday, 31 March was the day on which the India-UK Free Trade Agreement was signed and formalised as Prime Minister Narendra Modi visited the UK where he met his counterpart Keir Starmer. The agreement was signed by the Minister of commerce Piyush Goyal and his British counterpart Jonathan Reynold.
The trade agreement was three years in the making and it is calculated to increase the bilateral trade between the two economies by 34 billion every year.
FTA will be of great benefit to India as new opportunities will be opened in terms of growth, skills, and various sections where Indians can work.
This FTA will not only help the young people who are trying to make career in information technology, financial services, professional services, management consultancy, architectural and engineering, etc; but it will also help the young entrepreneur and Indian graduates to make career in the UK.
The deal with India is a big victory to Britain, which is our very landmark trade deal. It will generate thousands of British jobs up and down the country, open up new opportunities to businesses and spark growth in every part of the country and deliver on our Plan for Change, said PM Starmer.
British companies have declared new business in India by 26 companies.
Advantages of India Doing Trade Deal With UK
- Upon the emergence of this news, Indian industries and individuals will also get access to medical equipment, aerospace components manufactured in and imported to the UK at a relatively low price.
- There will also be easy access to British products like soft drinks, cosmetics, chocolates, biscuits, lamb, salmon and cars by the Indians because average tariffs will reduce to 3 per cent after enactment of Free Trade Agreement. Automobile: There will be a reduction of the tariff applied on electric vehicles that will be reduced to 10 percent in a quota previously placed at 110 percent.
- Once the trade pact takes effect, the export of whisky and other goods of British firms to India will be made easy as stated by PTI. Whisky will be exempted of 150 per cent duty charge to 75 and then 40 per cent after 10 years.
- Besides merchandises, the trade treaty will also facilitate the residency of Indians in the UK because the firms and freelancers will be able to work in 36 non-merchandise spheres in the UK without ‘Economic Needs Test’.
- Now, the Indian professionals can work in 35 sectors of the UK with a duration of 2 years with no office in the UK. The ministry of commerce has said that such a move can be beneficial to over 60,000 IT specialists annually. The big winners are TCS, infosys, Tech mahindra, hcl technologies and Wipro.
- The agreement will also have the benefit that Indian professionals will not have to pay social security authorities in the UK within 3 years.
The deal benefits also the professionals like chefs, yoga teachers, musicians and other contractual based jobs by giving them an access to the UK job market.
How UK is benefiting because of the trade deal
- The agreement will change the Indian tariffs significantly and the reductions will be gained on 90 per cent of tariff lines. They are 85 per cent that will be free of tariffs in 10 years.
- The companies in UK will have wider procurement access to Indian authorities.
- British firms will have the chance of making bids to non sensitive government tenders of over Rs 2 billion. This is to say that, the UK may get all the 40,000 tenders annually which sum up to approximately Rs 4.09 lakh crore.
- The UK will be able to create over 2,200 jobs as a direct result of the trade agreement.
- UK workers will also see a wage hike of up to 2.2 billion pounds each year.
- British people will see cheaper prices and more choice on clothes, shoes, and food products.
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