India and the United Kingdom will implement a free-trade agreement starting July 15, 2024 [1].
The deal aims to deepen economic ties by providing significant tariff relief for Indian exporters, particularly those in labor-intensive and agricultural sectors.
Under the terms of the agreement, India receives duty-free access on about 99% of tariff lines [2]. In exchange, India will implement a phased reduction of tariffs on about 90% of lines for UK goods [2]. This structure is designed to benefit exporters of textiles, agricultural products, and other labor-intensive industries [3].
The agreement also addresses specific industrial concerns, such as the steel sector. Approximately 85% of Indian steel exports to the UK fall outside the scope of the steel measure [4]. The value of Indian steel exports covered under the steel measure is $137 million out of $900 billion [4].
Trade officials said the agreement provides near-full market access for Indian goods. The phased approach for Indian tariff reductions allows the domestic market to adjust while still offering the UK competitive access to Indian consumers [2].
“India receives duty-free access on about 99% of tariff lines.”
This agreement signals a strategic shift in trade relations between India and the UK, prioritizing the growth of labor-intensive sectors. By securing nearly total duty-free access for its exports, India leverages its manufacturing and agricultural strengths to increase its footprint in the British market, while the phased tariff reductions for the UK suggest a cautious approach to protecting domestic Indian industries.
