India-UK FTA: India to lower duties on whisky, cars, cosmetics

The conclusion of the India-UK free trade agreement will lead to significant gains for both countries with bilateral trade growing to over $100 billion by 2030. In the near term, it means lower duties by India on several items from the UK including whisky, cars, cosmetics and medical devices, massive export opportunities for Indian goods, more visas for skilled Indian workers as well as a three-year exemption from social security contributions for Indian professionals temporarily working in the UK.
 
Negotiations for the FTA were launched in January 2022 and have finally been concluded amidst the trade and tariff war started by US President Donald Trump. Prime Minister Narendra Modi and UK Prime Minister Keir Starmer on Tuesday announced the successful conclusion of a mutually beneficial India – UK Free Trade Agreement (FTA).
 
As per the fine print, 99% of Indian exports will benefit from zero duty. According to an official statement, the FTA “opens up massive export opportunities for labour-intensive sectors such as textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery, and other important sectors such as engineering goods, auto parts and engines, and organic chemicals.”
 
As per a statement from the UK Department of Business and Trade, Indian tariffs will be slashed, locking in reductions on 90% of tariff lines, with 85% of these becoming fully tariff-free within a decade. Whisky and gin tariffs will be halved from 150% to 75% before reducing to 40% by year ten of the deal, while automotive tariffs will go from over 100% to 10% under a quota, it further said. 
 
Other goods with reduced tariffs, which can open markets and make trade cheaper for businesses and Indian consumers, include cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits.  
 
British shoppers could see cheaper prices and more choice on products including clothes, footwear, and food products including frozen prawns as UK liberalises tariffs. 
 
India’s commerce minister Piyush Goyal held talks with UK Business and Trade Secretary Jonathan Reynolds in London last week after relaunch of the talks earlier this year. The FTA takes place in the backdrop of growing economic relations between India and the UK as exemplified in the bilateral trade of about $ 60 billion which is projected to double by 2030.