India-UK FTA: Pact to cut tariffs and strengthen business confidence; what British Parliament was told

The India-UK Free Trade Agreement (FTA) signed on July 24 by Prime Ministers Narendra Modi and Keir Starmer will cut trade tariffs from 15% to 3% and is expected to bolster business confidence in a volatile global environment, British MPs were told on Monday.UK Business and Trade Secretary Jonathan Reynolds briefed the House of Commons on the pre-ratification process for the Comprehensive Economic and Trade Agreement (CETA), highlighting its potential impact ahead of full implementation, PTI reported.“This agreement drops the average Indian tariff on UK products from 15% to 3%, with duties falling by around £400 million at entry, rising to £900 million after staging,” Reynolds said. “It is expected to increase bilateral trade by £25.5 billion, raise UK GDP by £4.8 billion, and boost wages by £2.2 billion annually. In an increasingly unstable world, this deal provides businesses with confidence as they grow and expand.”The FTA secures preferential access to India’s federal procurement market, guarantees opportunities for UK service suppliers, and simplifies trade through improved customs and digital processes, Reynolds added. Specific regional gains include £190 million for the West Midlands and Scotland and £210 million for the North West, supporting the UK’s high-growth sectors.Reynolds also informed MPs about the commissioning of the Trade and Agriculture Commission, the Food Standards Agency, and Food Standards Scotland, whose reports under Section 42 of the Agriculture Act 2020 are needed before Parliament can ratify the agreement.Parallel negotiations on the Double Contribution Convention, agreed alongside the FTA to prevent temporary foreign workers from duplicating social security contributions, will also follow the standard parliamentary process.The India-UK CETA, signed during Modi’s UK visit, aims to double bilateral trade to $120 billion by 2030. While implementation in India requires only Cabinet approval, ratification in the UK is expected to take up to a year. In the House of Lords, junior minister Baroness Maggie Jones briefed peers on the progress of the FTA.