* Implementation date agreed after PM Starmer and Modi meet
at G7
* Deal between fifth and sixth biggest economies sees
tariffs cut
* India says UK addressed steel concerns in constructive way
(Adds details, context throughout)
LONDON/NEW DELHI, June 17 (Reuters) – A free trade deal
between Britain and India will come into force next month after
India said its concerns over the UK’s forthcoming steel tariff
regime, which threatened to delay implementation of the
agreement, had been addressed.
Britain and India agreed a long-coveted free trade pact last
year, binding the world’s fifth- and sixth-largest economies in
one of the most ambitious deals of its kind in the shadow of
tariff turmoil sparked by U.S. President Donald Trump.
The deal is forecast to boost British GDP by £4.8 billion
($6.5 billion) and increase bilateral trade by £25.5 billion in
the long run, according to UK government figures.
Under the agreement, India will cut whisky tariffs to 40%
from 150% by the deal’s 10th year, and automotives to 10% under
a quota from 100%, with Britain cutting tariffs on goods such as
clothes, footwear and some food.
COUNTRIES MOVE FORWARD WITH FTA AFTER LEADERS MEET
On Wednesday the two countries agreed to move ahead with
implementation of the trade deal on July 15 after British Prime
Minister Keir Starmer held talks with his Indian counterpart
Narendra Modi at a G7 leaders summit in France.
“A historic milestone for India-UK relations,” Modi said on
X, adding the agreement would “significantly boost our bilateral
trade and investment.”
Indian officials had previously raised the prospect of
reopening or delaying the application of the FTA over concern
about the impact of new UK steel trade measures, due to come
into effect on July 1.
In an effort to shield its domestic industry from a surge in
global supply, Britain will sharply reduce tariff-free quotas
for steel and impose steep duties on shipments beyond those
limits from next month, though details of the measures are still
being finalised.
The Indian government on Wednesday said 85% of Indian
exports would not be impacted by Britain’s steel measures, and
lines that were covered by the measures would have access
through quotas and other means.
“Following constructive deliberations… both sides mutually
agreed to protect commercial interests, minimize market
disruptions, and ensure an overall balanced and stable trading
environment for exporters,” the Indian government said.
A British official previously said that talks to implement
the FTA were separate to the steel trade measures, and
Wednesday’s announcement by the British government made no
reference to any separate deal on steel.
The free trade deal will come into effect almost exactly a
year after it was signed, which Britain said was the quickest
ever turnaround following signature. Indian officials previously
suggested the steel dispute prevented earlier implementation in
May, though Britain never put a timescale on talks.
“The deal gives British exporters an edge over
international competitors,” British Business and Trade Secretary
Peter Kyle said in a statement.
Britain and India have also agreed that workers will no
longer have to make social security contributions in both India
and Britain while on temporary postings to the other, and on
Wednesday said they had extended the length of time workers
could be exempted from so-called “double contributions” under
the scheme to five years from three.
($1 = 0.7462 pounds)
(Reporting by Alistair Smout and Shivangi Acharya in New Delhi;
additional reporting by William James and Muvija M in London,
Editing by William Maclean)
Commodities Economic News Mining Construction & Materials Government & Politics
