'Transformational Moment': FIEO sees big gains in key sectors from India-UK free trade pact

New Delhi, July 25 (IANS): The Federation of Indian Export Organisations (FIEO) on Thursday welcomed the India-UK free trade agreement as a "transformational moment" for Indian exporters as "the historic pact is set to double bilateral trade to $120 billion by 2030, up from the current $60 billion".

"The India–UK FTA opens unprecedented opportunities across key sectors, especially for MSMEs and labour-intensive industries. It not only reduces tariffs but also eases regulatory barriers for services and investments," FIEO President S.C. Ralhan said.

Signed by Union Commerce and Industry Minister Piyush Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds, the FTA is the culmination of years of negotiations and reflects a new era in India–UK economic cooperation.

The agreement provides 99 per cent of Indian exports, duty-free access to the UK market. There is a significant tariff reduction for Indian sectors such as textiles, footwear, leather, gems & jewellery, toys, sports goods, marine, processed food, and garments.

Tariffs for the UK's whisky exports to India will be reduced from 150 per cent to 75 per cent immediately, and eventually to 40 per cent over 10 years. Duties on automobile imports from the UK will be lowered from over 100 per cent to 10 per cent, under specific quotas.

Enhanced market access for Indian services professionals, including IT experts, chefs, yoga instructors, musicians, and intra-corporate transferees and a finalised Social Security Agreement to eliminate dual contributions for Indian professionals working in the UK are the other advantages of the agreement.

Ralhan emphasised that this FTA will greatly boost India’s manufacturing and services exports and attract UK investments into key growth sectors.

"Our exporters will now compete more effectively in a high-value market, and our service professionals will benefit from smoother mobility and reduced compliance hurdles," he noted.

The agreement also delivers a significant win for India’s agriculture sector. Products like turmeric, cardamom, pepper, mango pulp, pickles, and pulses will now enjoy duty-free access to the UK, enhancing farmers’ market reach and profitability.

In FY 2024–25, India’s exports to the UK grew by 12.6 per cent to $14.6 billion, while imports increased 2.3 per cent to $8.6 billion, taking total goods trade to $23.2 billion.

"This FTA lays the foundation for a more resilient, equitable, and mutually beneficial economic partnership between India and the UK," Ralhan added.

--IANS

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