Four things you need to know about the trade in the United Kingdom-India

The United Kingdom and India have concluded a trade agreement to make it cheaper and easier to buy and sell goods and services to each other.

Hope is that the agreement will benefit the savings of the two countries.

The British government said that the trade agreement was the “largest and most economical” trade agreement that the United Kingdom had signed since its departure from the European Union in 2020.

Here is a quick guide on what has been agreed and what it could mean for you.

The United Kingdom has lowered taxes on goods imported from India, in particular:

• Clothes and shoes
• food, including frozen shrimp
• Jewelry and gems
• Some cars

India has reduced taxes on goods imported from the United Kingdom, in particular:

• beauty products
• Scottish whiskey, gin and soft drinks
• Higher value cars
• food including lamb, salmon, chocolate and cookies
• medical devices
• aerospace
• electric machines

The agreement will also allow British companies to compete for more service contracts in India.

The trade agreement will not be in force up to a year, so do not expect to notice immediate changes.

Over time, however, the British government claims that the drop in prices on clothing, jewelry and frozen shrimp “could” lead to cheaper prices and more choice.

This agreement could also be a great victory for British companies that manufacture the goods that have seen reduced prices, such as car manufacturers and whiskey distiller.

For example, prices on whiskey and gin imported into India from the United Kingdom will be divided by two from 150% to 75% before reducing 40% by the 10th year of the agreement. Automotive prices will drop from more than 100% to 10%.

This will give a boost to these two industries, which seem to be hard affected by American prices, as this will mean that Indian companies wishing to import these products will pay less import costs than before.

If companies end up exporting more goods to India and making higher profits, this could lead them to spend more for hiring personnel, invest and pay more taxes.

In India, consumers could see much more choices among the goods that have been included in the agreement. Clothing companies and jewelers will also be able to access the British market that will increase their margins.

This agreement was long in progress, with negotiations in progress for three years.

However, it seems that the introduction of prices by American president Donald Trump on goods entering America prompted other world leaders to consider free trade agreements to conclude.

The British agreement with India is its third greatest after its agreements with Australia and Japan. For the context, the United Kingdom has signed trade agreements and agreements in principle with around 70 countries and one with the EU.

The EU is the largest trading partner for the United Kingdom and India. Consequently, a free trade agreement between India and the EU would be more important than that of the United Kingdom. India and the EU said they Aim for finalizing this by the end of 2025.

Last year, trade between the United Kingdom and India totaled 42 billion pounds Sterling. The British government said this agreement would increase this trade by 25.5 billion additional sterling per year by 2040.

It is said over time, this will increase the British economy by 4.8 billion pounds sterling. This is a small proportion of the British economy which was worth 2,851 billion pounds Sterling last year.

However, India should also become the world’s third economy in a few years. It also houses 1.45 billion people – approximately 20 times the population of the United Kingdom – which are many potential customers.

The United Kingdom is also a high priority trading partner for India, which has an ambitious objective to increase exports by 1 TN (750 billion pounds sterling) by 2030.

One of the reasons why the free trade agreement in British India has taken so much time to reach is that India had made major visas for visas for Indian professionals and students to work and study abroad.

The British government has said that this agreement does not include any change in immigration policy, including Indian students who study in the United Kingdom.

But it includes a three-year exemption from social security paid by Indian employees working in the United Kingdom, on short-term visas.

This agreement, known as the double contribution agreement, designed to guarantee that contributions to social security are not made in more than one country, was one of the elements that India had provided during negotiations.

The United Kingdom’s affairs secretary Jonathan Reynolds said the agreement would temporarily facilitate people with skills in the United Kingdom.

“It opens a small number of visas of an existing path for chefs and musicians of yoga, very, very small, about 1,800,” he added.