India-UK Free Trade Agreement May Take a Year to Implement
The India-UK Free Trade Agreement (FTA), signed in London on July 24, may take up to a year to be fully implemented. This is due to the requirement for the UK government to present the agreement to both houses of its Parliament before enforcement.
FTA to Undergo Committee Review in the UK
Before being tabled in the UK Parliament, the agreement will be reviewed by a select committee. In contrast, India only requires cabinet approval to implement the FTA. Once the legal processes in both countries are complete, an official implementation date will be announced.
Efforts to Implement Before One Year
According to Commerce Secretary Sunil Barthwal, the UK believes that this FTA will significantly boost its economy. As a result, the UK government is expected to try to implement it in less than a year.
Exporters to Get Time to Adapt Products
Once implemented, the agreement will allow trade between the two nations based on agreed tariff structures. The Indian Ministry of Commerce will inform exporters of the benefits and terms of the FTA through export promotion councils. Exporters will get time to upgrade their capacity and tailor product quality to meet UK market standards.
India’s Current Share in UK Imports is Low
Barthwal noted that the UK imports $37.52 billion worth of agricultural products annually, while India's share is only $810 million. Similarly, the UK imports $5.4 billion in marine products, with India contributing just 2.2%.
The UK also imports $50 billion in processed foods, but India’s contribution stands at a mere $31 million. The FTA could help more than double India’s agri exports to the UK within three years — provided product standards are improved.
Pre-Export Quality Checks to be Enforced
The FTA includes a clause requiring Indian products to undergo quality checks in accordance with UK regulations before being shipped. India is already setting up world-class labs to ensure global standards for agri exports. States will be consulted based on sector-specific feedback from exporters to devise export strategies accordingly.
FTA to Offer Stability in Trade Policies
One of the key benefits of an FTA is that it brings clarity and consistency to tariffs and policy regimes, enabling exporters to make long-term plans with more confidence.
Potential Tariffs on Indian Steel Under CBAM
Under the Carbon Border Adjustment Mechanism (CBAM), the UK may impose duties on Indian steel imports by 2027. India has clarified that if such tariffs are imposed, it reserves the right to impose retaliatory tariffs on UK products to offset the impact.