Hyderabad (Telangana) [India], July 24 : Bharatiya Janata Party spokesperson CR Kesavan on Thursday stated that the yet-to-be-signed India-United Kingdom Free Trade Agreement (FTA) marks a pivotal moment, providing Indian businesses, particularly SMEs, with a substantial competitive edge in the UK market.
The FTA ensures zero tariffs on 99% of Indian exports to the UK, covering nearly 100% of trade value. This move will eliminate import duties on sectors like textiles, leather, footwear, gems, and jewellery, making Indian goods more competitive in the UK market.
"The upcoming free trade agreement between India and the UK marks a historic milestone, a path-breaking defining moment in trade diplomacy. It will immensely benefit our nation and our people. This zero-tariff, zero-duty deal for 99 per cent of Indian exports provides Indian businesses, especially SMEs, with a significant competitive edge. This will also give a major boost to Indian manufacturing, like textile, leather, garments, processed food, and auto engine parts," Kesavan told ANI here.
The BJP leader's remarks come amid the United Kingdom announcing that India's average tariff on UK products will drop from 15 per cent to 3 per cent under the FTA, just ahead of the signing ceremony in the presence of Prime Minister Narendra Modi and his British counterpart, Keir Starmer, in London.
India has secured exemptions for professionals and businesses from contributing to UK social security for three years, saving approximately ₹4,000 crores annually. This exemption will benefit Indian workers and enhance the competitiveness of Indian service providers in the UK.
Discussing the 2024 FTA deal with the UK, he mentioned that the deal was worth 43 billion pounds, of which India's exports accounted for approximately 26 billion pounds.
"Another important aspect of this deal is how India, after tough negotiations, secured exemptions for professionals and businesses to contribute to UK social security for 3 years, saving approximately 4,000 crores annually. Another great opportunity for Indian businesses to enter the British public procurement market," Kesavan added.
The FTA offers Indian businesses a significant opportunity to enter the British public procurement market, potentially enhancing exports and driving economic growth. The agreement signals optimism for future trade growth, aiming to double bilateral trade to $100 billion by 2030.
The UK statement asserted that British companies selling products to India, from soft drinks and cosmetics to cars and medical devices, will find it easier to sell to the Indian market.
Furthermore, British whisky producers will benefit from tariffs being slashed in half, with the rate immediately reduced from 150 per cent to 75 per cent and then further reduced to 40 per cent over the next ten years, giving the UK an advantage over international competitors in accessing the Indian market, the UK statement noted.
"Our landmark trade deal with India is a major win for Britain. It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country, delivering on our Plan for Change," Starmer said in the statement.
The statement added that the British Prime Minister will welcome nearly £6 billion in new investment and export wins, which will create over 2,200 British jobs nationwide as Indian firms expand their operations in the UK and British companies secure new business opportunities in India.
The UK already imports £11 billion in goods from India, but liberalised tariffs on Indian goods will make it easier and cheaper to buy their best products, it added. "For businesses, this could mean potential savings when importing components and materials used in areas such as advanced manufacturing or luxury and consumer goods."
The announcement about the successful conclusion of the mutually beneficial FTA was made earlier on May 6. The forward-looking Agreement is aligned with India's vision of Viksit Bharat 2047 and complements the growth aspirations of both countries.