'Historic milestone': India, UK seal free-trade deal

Duplication of social security contributions to be nixed too

- SHREYA NANDI

After nearly three and a half years of intense negotiations, India and the United Kingdom (UK) on Tuesday announced the conclusion of talks for a free trade agreement (FTA) that will boost strategic and economic ties between the fifth- and sixth-largest economies in an era of geopolitical uncertainties and trade wars.

The trade deal, once implemented, may make import of whisky, gin, automobiles, medical devices, electrical machinery, cosmetics, soft drinks, chocolates, and lamb cheaper for India. It will also lead to significant increase in export competitiveness of Indian shipments in the UK for sectors like textiles, toys, leather, marine products, footwear, and gems & jewellery. Sensitive items like dairy products, apples, cheese, etc, have been excluded from any duty concession by India to protect its farmers.

In a massive win for New Delhi, both nations also concluded a double-contribution convention or a social security pact that will give Indian skilled professionals working in Britain a three-year exemption from social security payments. This has been India's longstanding demand, and is expected to benefit over 60,000 employees from the information technology (IT) sector alone. It will lead to savings of around 20 per cent of employee salaries.

Also, the benefits from the pact to Indian companies and employees may exceed ₹4,000 crore.

The negotiated document will now go through a legal scrubbing and clearance from both governments before it is signed.