India-UK free trade deal takes effect, cutting tariffs on 99% of Indian exports

The free trade agreement between the United Kingdom and India came into effect on Wednesday, removing or reducing tariffs on 99% of Indian exports to the UK and 90% of UK imports into India, the BBC reported. The British government has called it "the UK's biggest and most economically significant bilateral trade pact" since leaving the EU. The deal links the world's fifth- and sixth-largest economies. The UK government estimates its GDP will rise by 0.13% — about £4.8bn ($6.4bn) — and India's by 0.06%, or roughly £5.1bn a year in the long run, as a result of the agreement, according to the BBC. Indian manufacturers are already moving to capture the opening. Dipali Goenka, chief executive of Welspun Living — the Indian home-textile giant that supplies Wimbledon towels and bedsheets to major British retailers — told the BBC she expects the company's UK exports to grow "in double digits." India had been at a disadvantage to Bangladesh and Pakistan, whose goods enter the UK duty-free, while Indian textiles faced 12% tariffs, she said. ## What the India-UK trade deal changes for business The pact is a "real shift, not a small tweak" for British spirits, with customs duty on Scotch whisky cut from 150% to 75% immediately and due to fall to 40% over 10 years, Avneet Singh of Delhi import house Modern Drinks told the BBC. Labour-heavy sectors — textiles, garments, footwear, cars and marine products — are counting on the agreement to spur growth, the BBC reported. Research firm CareEdge predicts India could double its share of the UK's ready-made garment imports from 6% in 2024 to 12% in the near to medium term, as brands diversify sourcing away from China and Bangladesh. Trade specialists caution the overall effect may be "incremental rather than transformational." Ajay Srivastava of the Delhi-based Global Trade Research Initiative told the BBC the real test is whether products that previously faced UK tariffs of 4–16% — such as garments, footwear, carpets, cars and seafood — see higher orders and margins over the next one to three years. He noted unresolved friction, including UK tariffs on steel imports above a quota and a proposed carbon border tax (CBAM) that could offset some tariff gains. ## Global perspective The agreement reshapes competition among South Asian and global suppliers fighting for UK shelf space, with lessons for other developing economies negotiating market access. For African exporters — who also compete for preferential UK access under the Developing Countries Trading Scheme — the pact is a live example of how advanced-economy FTAs reorder supply chains and raise the bar on rules of origin and trade documentation. **Sources** - https://www.bbc.co.uk/news/articles/c0kymrz0vkgo - https://sourcereporters.com/business/diaspora-desk-nidcomnimc-digital-id-pact-london-athlete-screen-merit-based-appoi