In a historic move, Britain and India have officially signed a free trade agreement, marking a new era in bilateral relations between the two nations.
The agreement was finalized on Thursday during Indian Prime Minister Narendra Modi’s visit to Britain at Chequers, the country residence of the British prime minister. This significant deal follows an initial announcement made in May and promises to strengthen economic ties.
Major Reductions in Tariffs
Under the terms of the agreement, India’s average tariff on British products will dramatically decrease from 15% to just 3%. This reduction is set to benefit a wide range of industries and consumers in both countries.
Specifically, tariffs on whisky and gin exported from Britain to India will be halved from 150% to 75%, with plans to reduce them further to 40% over the next decade. British automotive exports will also see a substantial decrease in tariffs, dropping from over 100% to 10%, though these reductions will be subject to quotas.
Benefits for Both Nations
In return, an impressive 99% of Indian exports to Britain will now face zero tariffs. This move is expected to significantly boost Indian industries and enhance the availability of Indian products in the British market.
According to a statement from the British government, the agreement is projected to create over 2,200 jobs across Britain. It is also set to stimulate key sectors such as aerospace, technology, and advanced manufacturing.
“Thanks to the deal, British workers will enjoy a collective uplift in wages of 2.2 billion British pounds (approximately 2.98 billion U.S. dollars) each year,” the government announced. “Consumers could also see cheaper prices and more choices on clothes, shoes, and food products.”
Significant Increase in Trade
The agreement is expected to boost bilateral trade by nearly 39% in the long run, equivalent to an increase of 25.5 billion British pounds annually by 2040 when compared to projected levels of trade without the agreement.
This landmark deal highlights the growing partnership between Britain and India and sets the stage for enhanced economic cooperation. It reflects both nations’ commitment to fostering strong international relationships and promoting mutual growth.
