The Cabinet has approved the Free Trade Agreement (FTA) between India and Britain. The agreement will be signed in London on 24 July. The agreement is officially called the Cast Economic and Trade Agreement. It will be signed during Prime Minister Narendra Modi’s visit to London.
Modi’s four -day UK and Maldives visit begins on Wednesday. Commerce and Industry Minister Piyush Goyal will be with the Prime Minister. The two countries had announced the completion of negotiations for the trade agreement on May 6.
What will be cheap?
This trade agreement proposes to remove taxes on export of labor-dominated products like leather, shoes and textiles. It is also proposed to make the imports of whiskey and cars cheaper from Britain. The purpose of this agreement is to double the trade between the two countries to US $ 120 billion by 2030.
The agreement has chapters on issues like goods, services, innovation, government procurement and intellectual property rights. The Commerce Minister of the two countries usually sign the subject matter of the agreement. After the free trade agreement is signed, it will need the approval of the British Parliament before it becomes effective.
Both countries have also completed negotiations on double contribution conference agreement ie social security agreement. This will help in avoiding double contribution to the Indian professionals working for a limited period in Britain.
Import duty will end or be very low
However, negotiations on bilateral investment treaty still continue. It will come into effect after the signature and approval of the two countries. In such trade agreements, the two countries either eliminate or reduce the customs duty on maximum goods between them or significantly reduce them. These agreements also make the criteria to promote business in services and bilateral investment.
India’s exports to Britain increased by 12.6 percent to $ 14.5 billion in FY 2024-25, while imports increased by 2.3 percent to US $ 8.6 billion.