Lalit Garg
(lalitgarg11@gmail.com)
The historic Free Trade Agreement (FTA) between India and the United Kingdom has not only stirred the global trade arena but also set India's economic future on a transformative path. This deal marks a monumental shift in India's trade diplomacy, especially in an era of rising protectionism across the world. It is a significant strategic success of Prime Minister Narendra Modi, who has not only countered American tariff aggression but also carved out a bold and self-reliant economic path for India. This agreement is not merely a formal contract; it is a critical component of the broader vision to build a 'Developed India by 2047'. The Comprehensive Economic and Trade Agreement (CETA) with the UK eliminates nearly 99% of tariffs, providing a massive boost to labor-intensive sectors like textiles, leather, marine products, agriculture, and gems & jewellery. It also creates global visibility for India's small businesses, farmers, and fishermen, enabling rural produce like turmeric, pulses, pickles, and spices to enter premium British markets.
Over the last decade, the Modi government has consistently emphasized quality, competitiveness, and transparency, and this agreement is the outcome of that focused vision. It confirms that India is no longer just a marketplace-it is now a decisive economic power that negotiates with global players from a position of strength. Importantly, this FTA goes far beyond goods-it opens up fresh avenues in services, education, financial sectors, investments, and social security. Of particular significance is the provision that Indian professionals working in the UK will be exempt from social security contributions for three years, enhancing India's competitive edge in the global services market. This agreement is also a diplomatic statement: despite U.S. pressure and trade uncertainties unleashed by policies like Trump's tariff wars, India did not yield. Instead, it built new alliances and strengthened existing ones, demonstrating maturity and resilience in trade diplomacy.
The India-UK FTA is a prime example of how India can negotiate fair and inclusive trade agreements that protect the interests of its farmers, dairy producers, and small-scale industries. Sensitive sectors like dairy, apples, oats, and edible oils were kept out of the agreement, upholding India's food security and self-reliance. The current bilateral trade volume of around $21 billion is expected to grow to $120 billion by 2030, thanks to this agreement. It will not only attract foreign investments but also help increase India's manufacturing share in GDP from 17% to 25%. With India currently accounting for just 2.8% of global manufacturing (compared to China's 28.8%), such deals are critical to bolstering its global manufacturing footprint.
In line with the 'Make in India' vision, the FTA provides tariff relief on nearly all Indian exports to the UK, making Indian products more affordable and competitive. Conversely, British goods entering India will also become cheaper, benefiting Indian consumers through high-quality goods at lower prices, thus enhancing the standard of living. Agriculture too stands to gain significantly. With over 95% of agri and processed-food tariff lines facing zero duties, India's agri-exports are expected to rise by over 20% in the next three years, helping achieve the $100 billion agriculture export target by 2030. This opens premium markets for Indian farmers and promotes higher income, better packaging, quality, and certification systems. India's strategic policy approach is evident here. While the U.S. continues to demand full access to India's agriculture and dairy sectors-something India cannot allow for the sake of its farmers-this deal with the UK proves that India can open up intelligently while still protecting its vulnerable sectors.
Under Modi's leadership, India has emerged as an economic sunrise, offering immense possibilities for global collaboration. Countries are now queuing up to become a part of India's incredible growth story. A series of FTAs with Australia, UAE, Mauritius, and the European Free Trade Association (EFTA) are already in place, and negotiations with Europe are advancing. These agreements not only tackle economic challenges but also reinforce India's position as a preferred global trade partner. The UK deal also reflects a shift in India's trade philosophy-one that goes beyond goods and services, embracing cultural exchange and citizen welfare. The India-Australia FTA resolved issues like double taxation, helping Indian IT firms. Similarly, the UK deal addresses dual social security contributions, making it easier for Indian employees and companies operating in the UK.
Since 2014, the Modi government has adopted a consultative and industry-aligned approach before signing any major FTA. Stakeholders have overwhelmingly supported these agreements, viewing them as steps toward a stronger, developed India. If a future India-US deal is sealed under similar terms, it will only propel India's economic transformation further. But even without it, the UK agreement alone has redefined the boundaries of India's trade potential. This agreement is not just about increasing exports; it is about building the India of tomorrow-where agriculture prospers, industries expand, youth get opportunities, and India becomes a truly developed nation. Indeed, where markets create opportunities and policies lay the foundation for the future, this India-UK agreement echoes the voice of a rising India across the world.
Silently hear everyone. Accept what is good.
Reject and forget what is not. This is intelligent living.
— Swami Chinmayananda