India-UK 'landmark' FTA: a few highlights

India and the UK on Tuesday sealed a landmark free trade agreement (FTA) along with a double contribution convention, with Prime Minister Narendra Modi saying the "historic milestone" will catalyse trade, investment, growth and job creation in both economies.

Announced after a phone conversation between PM Modi and his British counterpart Keir Starmer, the trade deal is the biggest the UK has signed since leaving the European Union.

"In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention," Modi said in a social media post.

"These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies," he said.

The conclusion of a "balanced, equitable and ambitious" FTA, covering trade in goods and services, is expected to significantly enhance bilateral trade, generate new avenues for employment, raise living standards, and improve the overall well-being of citizens in both countries, an Indian readout said. "It will also unlock new potential for the two nations to jointly develop products and services for global markets," it added.

The leaders described it a historic milestone in the bilateral comprehensive strategic partnership that would foster trade, investment, innovation and job creation in both the economies.

Starmer said strengthening alliances and reducing trade barriers with economies around the world is part of the plan for change to deliver a stronger and more secure economy. The British PM's office said the deal which will add billions to the UK economy, boost wages and deliver on this government's plan for change.

Following are the highlights of the India-UK free trade agreement and the Double Contribution Convention pact.

*99 per cent Indian exports to benefit from zero duty in UK market

*Indian import duty will be slashed, locking in reductions on 90 per cent of tariff lines, with 85 per cent of these becoming fully tariff-free within a decade

*Whisky and gin tariffs will be halved from 150 per cent to 75 per cent before reducing to 40 per cent by ten years of the deal

*Automotive tariffs will go from over 100 per cent to 10 per cent under a quota

*Other goods with reduced import duties, which can open markets and make trade cheaper for businesses and Indian consumers, include cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits

*British shoppers could see cheaper prices on products including clothes, footwear, and food products including frozen prawns as UK liberalises tariffs

*The deal is expected to increase bilateral trade by £25.5 billion, UK GDP by £4.8 billion and wages by £2.2 billion each year in the long run.

*Barriers to trading will be dropped, with India agreeing to reduce tariffs on a whole host of products including whisky, medical devices, advanced machinery, and lamb, making UK exports more competitive

*Opens up export opportunities for labour-intensive sectors such as textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery, engineering goods, auto parts and engines, and organic chemicals

*Boost to trade in services, such as IT/ITeS, financial services, professional services, other business services and educational services

*Three-year exemption from social security payments for Indian employees working in the UK

*Bilateral trade projected to double by 2030 from USD 60 billion

*India will gain from tariff elimination on about 99 per cent of the tariff lines covering almost 100 per cent of the trade value offering opportunities for increase in the bilateral trade between India and the UK

*India will benefit from FTA commitment from the UK in services such as IT/ITeS, financial, professional, and educational services

*FTA eases mobility for professionals including Contractual Service Suppliers; Business Visitors; Investors; Intra-Corporate Transferees; partners and dependent children of Intra-Corporate Transferees with right to work; and Independent Professionals like yoga instructors, musicians and chefs

*India secures significant commitments on digitally delivered services such as architecture, engineering, computer related and telecommunication services

*The exemption for Indian workers who are temporarily in the UK and their employers from paying social security contributions in the UK for a period of three years under the Double Contribution Convention will lead to financial gains for Indian service providers and enhance their competitiveness in the UK

*India ensures that non-tariff barriers are suitably addressed to ensure free flow of goods and services and that they do not create unjustified restrictions to its exports