India’s Modi and UK PM Starmer ink trade deal
The accord slashes tariffs on imports of UK goods into India
LONDON: Prime Minister Keir Starmer praised Britain’s “unique bonds” with India as he and his Indian counterpart Narendra Modi formally signed a recently announced UK-India trade deal during talks on Thursday.
Starmer hailed the agreement as a “landmark moment” for both countries as he hosted India’s leader at his Chequers country estate, northwest of London.
“This is not the extent or the limit of our collaboration with India,” added the British premier, whose year-old government is struggling to fire up an economy weakened by years of stagnant growth and high inflation.
“We have unique bonds of history, of family and of culture and we want to strengthen our relationship further, so that it is even more ambitious, modern and focused on the long term,” he said.
Starmer and Modi announced in May they had struck a free trade agreement that the British government says will eventually add 4.8 billion pounds ($6.5 billion) a year to the UK economy.
The UK and India hope the accord will boost trade between the two countries by 25.5 billion pounds, as well as bolstering the British economy and wages.
How India benefits from the trade deal
Now, Indian industries and people will be able to access medical devices, aerospace parts made and imported from the UK at a much cheaper cost.
British products such as soft drinks, cosmetics, chocolates, biscuits, lamb, salmon and cars will also be easily accessible to Indians, as the average tariffs will drop from 15 per cent to 3 per cent after the Free Trade Agreement comes into effect. Electric vehicles will see a tariff cut from 110 per cent to 10 per cent within a quota.
After the trade deal comes into operation, it will be easier for British firms to export whisky and other products to India per PTI. Import duty on whisky will fall from 150 per cent to 75 per cent immediately and to 40 per cent over 10 years.
Apart from products, the trade agreement also makes it easier for Indians to live in the UK as firms and freelancers will have access to 36 service sectors in the UK with no ‘Economic Needs Test’.
Indian professionals will now be able to work in 35 sectors in the UK for 2 years even without an office in the country. The commerce ministry has stated that the move could benefit more than 60,000 IT professionals each year. Major beneficiaries include TCS, Infosys, Tech Mahindra, HCL Technologies, and Wipro.
Indian professionals will also be exempted from UK social security payments for 3 years under the agreement.
The deal also helps professionals such as chefs, yoga teachers, musicians and other contract-based workers by helping them enter the UK job market.
How UK benefits from the deal
The deal will lead to major cuts in Indian tariffs with reductions secured on 90 per cent of tariff lines. In 10 years, 85 per cent of these will be exempt from tariffs.
UK businesses will gain expanded access to public procurement opportunities in India.
British companies will be able to bid on non-sensitive government tenders valued above Rs 2 billion. This means, the UK can potentially participate in 40,000 tenders each year, collectively worth around Rs 4.09 lakh crore.
The UK will be able to create over 2,200 jobs as a direct result of the trade agreement.
UK workers will also see a wage hike of up to 2.2 billion pounds each year.
British people will see cheaper prices and more choice on clothes, shoes, and food products.
Modi, standing alongside Starmer during a media appearance, described the deal as a “blueprint for our shared prosperity”.
Britain and India are the sixth and fifth largest global economies respectively, with a trade relationship worth around #41 billion and investment supporting more than 600,000 jobs across both countries.
The accord slashes tariffs on imports of UK goods into India, including whisky, cosmetics and medical devices.
In return, the United Kingdom will cut tariffs on clothes, footwear and food products including frozen prawns from India.
Starmer and Modi were also likely to discuss last month’s Air India disaster in which 241 people died when a London-bound flight crashed after taking off from Ahmedabad in western India.
Some 169 Indian passengers and 52 British nationals were killed in the June 12 crash, one of the deadliest plane disasters in terms of the number of British fatalities.
Sikh blogger
A lawyer for 20 British families said this week the repatriation of victims had been marred by errors with one relative finding that a returned coffin contained “co-mingled” remains.
A different family was told a coffin contained the body of someone else entirely, not their loved one, he said, according to UK media.
India’s foreign ministry has said all remains “were handled with utmost professionalism” and that it is “continuing to work with the UK authorities on addressing any concerns related to this issue”.
Another tricky topic of discussion could be that of Scottish Sikh blogger Jagtar Singh Johal, imprisoned in India since 2017 on accusations of being part of a terror plot against right-wing Hindu leaders.
He has not been convicted of a crime and in March was cleared of one of the nine charges against him.
His brother Gurpreet Singh Johal said in a statement the case “should be high on the agenda” during the two leaders’ meeting.
Starmer and Modi have met twice recently, at the G7 summit in Canada last month and at the G20 meeting in Brazil last year.
Modi was also due to see King Charles III during his brief stay in Britain, his fourth visit since becoming India’s leader in 2014.
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