(Image source from: Moneycontrol.com)
The cabinet approved the free trade deal between India and the UK on Tuesday, which is set to be signed in London on July 24, according to sources. This agreement, officially known as the Comprehensive Economic and Trade Agreement, will be signed during Prime Minister Narendra Modi's trip to London. PM Modi's four-day travel to the United Kingdom and the Maldives starts on Wednesday. The Commerce and Industry Minister, Piyush Goyal, will join the prime minister. The two nations announced that they finished talks for the trade agreement on May 6. The trade deal aims to eliminate taxes on exporting labor-heavy goods like leather, shoes, and clothing, while also making whisky and car imports from Britain more affordable, with a goal of increasing trade between the two countries to USD 120 billion by 2030. The deal contains sections dealing with various topics, such as goods, services, innovation, government purchasing, and intellectual property rights.
Typically, commerce ministers from both nations sign the agreement. After the free trade deal is signed, it must get the go-ahead from the British Parliament before it can be put into action. The two nations also wrapped up discussions for the Double Contribution Convention Agreement, or social security agreement, which would prevent Indian workers in Britain from paying social security contributions twice. However, discussions for the bilateral investment treaty (BIT) are still ongoing. The free trade agreement becomes active after both nations sign and approve it. In these types of trade agreements, countries usually either remove or greatly lower customs fees on most goods traded between them.
They also make it easier to conduct trade in services and investments together.
India's exports to the UK rose by 12.6 percent to reach USD 14.5 billion, while imports increased by 2.3 percent to USD 8.6 billion in 2024-25. The trade relationship between India and the UK grew to USD 21.34 billion in 2023-24 compared to USD 20.36 billion in 2022-23.
