Nation seals groundbreaking, billion-pound commerce accord with India

Nation seals groundbreaking, billion-pound commerce accord with India

Groundbreaking India-UK Trade Deal Unveiled

📣 A new era in trade relations between India and the UK has kicked off after the two nations inked an impressive free trade agreement (FTA), marking the UK's most significant trade deal since Brexit and the best agreement India has ever signed, according to government officials.

🤔 This game-changing pact, which is now waiting to be ratified by Parliament, is projected to add £4.8 billion to the UK economy, potentially reaching up to £25.5 billion in bilateral trade.

🛍️ Critics have raised concerns over the preferential employment tax treatment offered to Indian workers in the UK, questioning the fairness of the deal.

🌐 Here's a sneak peek into what the India-UK FTA entails: the agreement will see significant tariff reductions by India on a whopping 90% of tariff lines, with 85% becoming tariff-free within a decade, amounting to annual savings of £400 million, increasing to £900 million within ten years.

🥃 Treasure trove liquor fans might appreciate the deal—Indian whiskey and gin tariffs will be halved from 150% to 75%, while automotive tariffs will see a drastic 90% reduction, though they'll remain subject to quotas.

🚗🇬🇧 Keen on sprucing up your wardrobe and expanding your culinary horizons? You can expect cheaper prices and greater variety on goods such as clothing, footwear, and a selection of food products. Although, it's worth noting that the deal excludes certain food items, like dairy products and rice.

💼 Economics expert Ben Ramanauskas from Policy Exchange shared his thoughts about the deal: "The economic potential is significant, thanks to India's high tariffs. The government deserves praise for finalizing this agreement."

🚀 The agreement seemed to have hit a snag due to disagreements over visa rules, but a breakthrough was achieved after the UK gave in on a key point: waiving national insurance payments for Indian migrant workers—a move that sparked a fervent reaction from the opposition.

🗣️ Critics accused Labor leader Keir Starmer of neglecting British workers: “Desperate for a victory, Keir Starmer simply handed an exemption from paying national insurance to Indian workers … while increasing it for British workers,” said Shadow Business Secretary Andrew Griffith.

🎉 Prime Minister Narendra Modi hailed the deal: "We have jointly achieved an ambitious, mutually beneficial Free Trade Agreement." Modi believes the deal will catalyze trade, investment, growth, job creation, and innovation in both economies.

🇬🇧 Prime Minister Keir Starmer shared his optimism about the deal’s impact on the UK's trade and economy: "We are now ushering in a new era for trade and the economy. This means pushing forward to boost the UK’s economy further and faster, increasing salary pockets for working people."

💼 The UK has been a key trading partner with India, with British exports to the country worth around £7 billion in 2024, although India's exports to the UK totaled £10 billion.

💬 Fun fact: Under the India-UK FTA, Indian professionals on short-term assignments in the UK will no longer need to pay National Insurance contributions in both countries, as a Double Contribution Convention has been introduced to address this issue. Indian workers can now contribute to India’s social security schemes during their tenure in the UK, eliminating double contributions and potentially reducing employment tax burdens.

[1] Enrichment Data: This change represents a significant easing of employment tax costs for Indian nationals working temporarily in the UK under the India-UK FTA framework and is expected to promote greater employment and business collaboration between the two countries. Indian professionals can now avoid paying both UK National Insurance and Indian social security contributions simultaneously, reducing their tax burden on employment income. Indian employees can also maintain contributions to India’s domestic social security schemes during their work tenure in the UK. This agreement furthers the mobility of skilled Indian professionals, simplifying employment terms and taxes for various professional sectors.

1. To promote greater employment and business collaboration between India and the UK, Indian professionals working temporarily in the UK under the India-UK FTA framework will now avoid simultaneous payments of both UK National Insurance and Indian social security contributions.
2. This change is expected to enrich employment opportunities for Indian professionals, as they can now maintain contributions to India’s domestic social security schemes during their work tenure in the UK, potentially reducing their tax burden on employment income.
3. This significant easing of employment tax costs is good news for the Indian economy, as it strengthens the attractiveness of India as a destination for skilled professionals and business ventures.
4. By 2024, the India-UK FTA is projected to have a profound impact on the financial landscape, with anticipations of increased trade and investment between the two countries, ultimately contributing to the overall strengthening of both economies.

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