India-UK Free Trade Agreement: A Leap Forward for Services and Automobiles

The landmark free trade agreement between India and the UK promises significant changes in trade dynamics, with substantial tariff reductions and eased export conditions. This pact is set to enhance the bilateral trade relationship, giving both countries new opportunities for economic growth.

One of the focal points of the agreement is the automotive sector. India has agreed to decrease import duties on vehicles over 10-15 years, although specific safeguards are in place to protect its domestic industries. The import of British cars, particularly ICE vehicles, will gradually see reduced duties, benefitting global players like Tata-JLR.

Significant attention is also given to services, contributing 58% of the India-UK trade in 2024. The agreement is expected to make Indian services more competitive, especially with new measures like the Double Contribution Convention pact, which will save Indian providers Rs 4,000 crore annually, while opening up new opportunities in the UK market.

(With inputs from agencies.)