Most comprehensive trade deal India has negotiated, to be the template for future engagements: Commerce Ministry | Business News

The impetus to wrap up the trade deal comes against the backdrop of the US catalysing a major reset in global trade order after the series of protectionist measures rolled out by the Donald Trump administration.

While full details of the India-UK agreements are awaited, negotiators on the Indian side have been cognizant of the fact that any concessions, tariff or otherwise, made in this FTA would have to be potentially replicated in the ongoing trade deal negotiations, especially with the US and the EU.

Also, a contentious bilateral investment treaty between India and the UK continues to hang fire, with both sides finding it difficult to ease out differences related to some of the clauses of the investment pact. This bilateral trade deal was also slightly complicated given that both India and the UK are services hubs and there was much less complementarity on issues, as compared to, for instance, the pact negotiated earlier with Australia. Also, London was explicitly clear about it not wanting an early harvest deal, of the kind that India had signed with Australia.

After the signing of the UK deal, India’s Ministry of Commerce and Industry said Tuesday that the trade deal will open up export opportunities for labour-intensive sectors such as textiles, marine products and leather, among others, as around 99 per cent of Indian exports will benefit from zero-duty access to the UK market. The India-UK Free Trade Agreement (FTA), it said, ensured “comprehensive market access for goods across all sectors, covering all of India’s export interests” and that India will gain from tariff elimination on approximately 99 per cent of tariff lines.

This will cover “almost 100 per cent of trade value” — offering opportunities to increase bilateral trade between India and the UK.

The Ministry also said that India has secured “significant commitments on digitally delivered services for Indian service suppliers”, especially in professional services such as architecture and engineering, computer-related services, and telecommunications services, a major area of concession for the Indian side.

While both governments are expected to release the official text of the trade deal in due course, New Delhi’s view is that an exemption secured for Indian workers temporarily in the UK — and their employers — from paying social security contributions for a period of three years under the Double Contribution Convention is a net positive for India. This, Ministry officials said, will result in “significant financial gains for Indian service providers”.

The Ministry said that the FTA eases mobility for professionals, including contractual service suppliers; business visitors; investors; intra-corporate transferees; partners and dependent children of intra-corporate transferees with the right to work; and independent professionals such as yoga instructors, musicians and chefs.

“This agreement sets a new benchmark for equitable and ambitious trade between two large economies. It will benefit Indian farmers, fishermen, workers, MSMEs, start-ups, and innovators. It brings us closer to our goal of becoming a global economic powerhouse. This FTA is not only about goods and services, but also about people, possibilities, and prosperity. It protects our core interests while opening doors to India’s greater participation in global value chains,” Commerce Minister Piyush Goyal said.

Commerce Secretary Sunil Barthwal said the FTA is a game-changer and will further propel India on the path of rapid economic growth, while enhancing India’s global integration. “This is the most comprehensive free trade deal India has ever entered into and will be the gold standard for our future engagements,” he said.