India-UK trade agreement: New chapter for economic partnership
The free trade agreement signed between India and the UK is a great boon for both countries in the business sector. The biggest feature of this agreement is the symbolic pushback against tariffs during a period of escalating trade tensions, specifically the US tariff war. Coffee, tea, footwear, gems, jewellery, auto parts, marine and spices from India will be completely duty-free in the UK. The selling prices of such goods will come down, and demand will increase when this happens, so exports can be expected to increase significantly. As part of the agreement, it has been decided to reduce tariffs on 90 percent of British products imported into India. The average tariff on British products in India was 15 percent before the agreement. Now, it will be reduced to three percent.
The reduction in duty on cars imported from Britain from 100 percent to 10 percent will lead to a significant reduction in the selling price of British-made luxury vehicles in India. This move will pave the way for Britain to earn a good income from India, as India is transforming into a market where the largest number of luxury cars are sold in the world. In return for a significant reduction in duty on British-made cars, Indian electric and hybrid vehicle manufacturers will get access to the British market. This, in turn, will attract more investment in related sectors in India. The new agreement will pave the way for more opportunities for Indian professionals, including Malayalis, seeking employment in Britain. This will allow 60,000 Indian professionals to get jobs in Britain every year.
As Kerala is one of the leading states in exporting seafood and spices from India to Britain, this agreement will be of great benefit to our state in the future. Since the agreement needs to be approved by the British Parliament, it will take about a year to come into full force. The agreement was signed by Union Commerce Minister Piyush Goyal and UK Trade Secretary Jonathan Reynolds in the presence of Prime Minister Narendra Modi, who is visiting Britain, and UK Prime Minister Keir Starmer. As part of this agreement, about 99 percent of Indian products will reach Britain duty-free. Similarly, 90 percent of British products will also have reduced taxes in India.
Dairy products, apples, oats and edible oils are not included in the agreement as they would adversely affect the interests of Indian farmers. Six British universities will open campuses in India as part of the agreement. With the increasing number of Indian students going to Britain and other countries for studies, opening campuses of such universities in India will provide relief to many Indian students in terms of study costs. The announcement that social security contributions will be exempted for Indian workers and contract employees coming to the UK for up to three years is also very praiseworthy. Even toddy from Kerala may find a place in the British market, according to the agreement. Prime Minister Modi's statement that the agreement will benefit India's youth, farmers, small traders, and workers in the fishing sector will hopefully be proven in the coming days.