The new Free Trade Agreement (FTA) between India and the UK is a “game-changer” for India’s economic growth and global standing, Union Commerce Minister Piyush Goyal recently stated, highlighting its potential to accelerate India’s journey towards becoming the world’s third-largest economy.
A Milestone for India’s Global Ambitions
Piyush Goyal emphasized that this FTA, signed after more than two decades of discussions, is a significant step for India’s “local for global” and Atmanirbhar Bharat initiatives. He attributed the success of clinching this deal to Prime Minister Narendra Modi’s global popularity and acceptance, calling it the largest, most significant, and comprehensive FTA India has ever signed.
Boosting India’s Economy and MSMEs
The Commerce Minister underlined that the FTA offers vast opportunities for various sectors, including farmers, entrepreneurs, and the crucial Micro, Small and Medium Enterprises (MSME) sector. It also benefits the labor force, youth, and fishermen across the country. Goyal noted that the agreement addresses complex international topics where India previously struggled to compete, but now has done so confidently on its own terms.
Key Sectors Set to Benefit
The FTA is expected to significantly boost labour-intensive sectors like textiles, footwear, leather, toys, and furniture. The gems and jewellery, and pharmaceutical sectors are also poised for substantial growth. This push helps Indian products transition from “local to global,” particularly benefiting Geographical Indication (GI)-tagged products.
Protecting India’s Interests
Goyal assured that the agreement is balanced and carefully protects India’s sensitive economic interests. Crucially, the dairy sector and other identified sensitive agricultural items have not been opened up for unrestricted trade. This “win-win” approach ensures a comprehensive, simple, and balanced cooperation that benefits both nations.
From Kolhapuri Chappals to Indian Spices
A notable benefit includes duty-free access for Indian spices to the UK market. This will particularly cater to the tastebuds of the 50-lakh strong South Asian diaspora residing in the United Kingdom. Furthermore, GI-tagged products, such as the famous Kolhapuri chappals, will receive proper recognition and credit when exported, preventing misuse of their design and origin.
Goyal expressed his personal belief that Kolhapuri chappals alone could generate international business worth 8,000 to 10,000 crore rupees, given their unique appeal and design.
Support for Indian Professionals in the UK
The agreement also includes a Double Contribution Convention Agreement. This pact will significantly reduce the cost of doing business for Indian-origin professionals in the UK by addressing social service contributions. It ensures that contributions made by those working for up to three years in the UK can be transferred to their EPFO accounts in India, promoting fair competition in the UK’s services sector, including IT, AI, and finance.
A New Approach to FTAs
Goyal contrasted the current FTA approach with previous agreements signed by past governments. He claimed that earlier FTAs were often detrimental, opening Indian markets to competitors and causing losses to the manufacturing sector. In contrast, agreements under PM Modi are strategic, signed with developed nations that complement India’s economy rather than compete with it.
This strategic shift is aimed at strengthening the ‘Make in India’ initiative and fostering a ‘Viksit Bharat’ (developed India), marking a new era of mutually beneficial trade relationships.
- The India-UK FTA is hailed as a comprehensive and significant agreement, signed after two decades.
- It is expected to boost India’s economy and accelerate its path to becoming the world’s third-largest economy.
- Key sectors like MSMEs, textiles, and agriculture are set to benefit, with sensitive areas like dairy protected.
- Indian GI products like Kolhapuri chappals and spices will gain global recognition and duty-free market access.
- The agreement includes provisions to benefit Indian professionals working in the UK through a Double Contribution Convention.
This landmark FTA marks a new chapter in India’s global trade relations, aligning with the vision of a self-reliant and developed nation.
