India and the United Kingdom have officially concluded a Free Trade Agreement (FTA) and a Double Contribution Convention, marking a significant advancement in their strategic partnership. The announcement followed discussions between Prime Minister Narendra Modi and his UK counterpart, Prime Minister Keir Starmer.
PM Modi characterized the FTA as "ambitious and mutually beneficial," emphasizing its potential to strengthen the Comprehensive Strategic Partnership between the two nations and stimulate growth across various sectors. He anticipates that these landmark agreements will boost trade, investment, job creation, and innovation in both economies. He also expressed his anticipation of welcoming PM Starmer to India soon.
Echoing this sentiment, UK PM Starmer hailed the agreement as a "historic moment". In a statement, he highlighted that the trade deal with India is fantastic news for British businesses, workers, and shoppers, delivering on their Plan for Change. Starmer emphasized that strengthening alliances and reducing trade barriers with economies around the world is part of their plan to deliver a stronger and more secure economy.
The Prime Minister's Office (PMO) issued a press release emphasizing the expansion of economic and commercial ties between India and the UK as a cornerstone of their increasingly robust and multifaceted partnership. The FTA, encompassing both goods and services, is projected to substantially increase bilateral trade, create employment opportunities, raise living standards, and enhance the quality of life for people in both nations. This agreement is expected to add billions to the UK economy, boost wages and deliver on the government's Plan for Change. The leaders noted that this historic deal is the biggest the UK has done since leaving the EU, and the most ambitious India has ever done.
The "double contribution convention" will ensure that Indian workers will not have to pay National Insurance contributions in both countries for the first three years of a transfer to the UK, and vice versa.
India is seeking enhanced opportunities for its qualified professionals in the UK's IT and healthcare sectors, along with duty-free entry for various products. The UK is reportedly seeking reduced tariffs for its exports, including Scotch whisky and electric vehicles, and aims to increase its presence in India's services sector, particularly in telecommunications, legal, financial services, banking, and insurance.
The UK government said that the deal meant that UK's points-based immigration system would not be affected. The agreement will add £4.8 billion to UK economy and £2.2 billion in wages a year by 2040. The UK government claimed the agreement would add £4.8 billion to UK economy and £2.2 billion in wages a year by 2040.
