India-UK Free Trade Agreement to Come into Force on July 15

India and the UK on Wednesday announced that their landmark free trade agreement (FTA) will come into force on July 15, paving the way for tariff reductions, greater market access and enhanced economic cooperation between the two countries.

The announcement marks the final step before implementation of the trade pact, which was signed last year and is being described by the UK government as the most comprehensive trade agreement India has ever brought into force.

Businesses in both countries now have 28 days to prepare before the agreement takes effect.

"The countdown begins! The UK and India have agreed that the Free Trade Agreement will come into effect on 15 July. An historic moment for the modern UK-India partnership, unlocking a new era of growth for both our economies," UK High Commissioner to India Lindy Cameron said in a post on X.

According to the UK government, the agreement is expected to boost bilateral trade by £25.5 billion annually in the long run, while adding £4.8 billion to the UK's GDP and increasing real wages by £2.2 billion.

The agreement will lead to significant tariff reductions on a range of products.

Under the deal, tariffs on British whisky exports to India will be reduced from 150% to 40%, while duties on automobiles will fall from 100% to 10% under a quota mechanism.

Tariffs of up to 22% on cosmetics will either be eliminated immediately or phased out over the next decade.

The UK will also reduce tariffs on a range of Indian exports, including clothing, footwear and selected food products.

The British government said lower import costs could translate into greater product choice and potentially lower prices for consumers.

UK Business and Trade Secretary Peter Kyle urged companies to use the next four weeks to get ready for the agreement's implementation.

"We are bringing our landmark trade deal with India into force as quickly as we can, because we want businesses and the public to feel the benefits immediately, including cuts to tariffs of £400m within the first year alone," Kyle said.

"The deal gives British exporters an edge over international competitors, and I would encourage all businesses to ensure they are properly prepared to allow them to sell to India's huge market in the years to come," he added.

The UK government said businesses seeking to benefit from tariff concessions would need to complete registration requirements with HM Revenue and Customs (HMRC) before the agreement takes effect.

Alongside the FTA, the UK-India Double Contributions Convention Agreement will also enter into force on July 15.

Under the arrangement, UK nationals working in India and Indian professionals working in the UK under existing visa categories will be allowed to continue contributing to their home country's social security system for up to 60 months without making parallel contributions in the host country.

The UK said the provision is similar to social security arrangements it already has with countries such as Japan, South Korea and Canada.

The implementation of the FTA comes after months of negotiations and technical preparations by both governments and is expected to provide a fresh boost to trade and investment flows between the two economies.