The official document was signed in late July, after three years of intense negotiations, in which the negotiations had risked collapsing more than once. In the end though, United Kingdom And India managed to reach the commercial agreement of free trade – in which many not even believed more – which opens new routes for the British economy, at the same time scoring the end of decades of protectionism for the country led since 2014 by Prime Minister Narendra Modi. On the plate, exchanges that could lead to economic growth of 4.8 billion pounds (5.5 billion euros), ranging from the luxury car market to the food, from clothing to jewelry, to pharmaceutical products.
Interested sectors and duties reduction
Incentivized by the war of the duties of Donald Trump, who forced even historic British allies to think of a less bound economy to the American one, the new agreement, is also the most important third signed by the United Kingdom, after that with Australia and Japan. The effects will not be seen immediately, given that what has been agreed between the two governments will come into force only in a year, but it is certain that companies of some sectors will be able to benefit from much lower duties, as in the case of high -end cars and some super -cacol.
Gin, Scotch and Whiskey, imported into India by the United Kingdom will see the rates halved that will initially go from the current 150 to 75 percent, to go down to 40 percent in the next decade. Taxes for the four wheels will become a tenth of today (but it will only be worth a share of the cars sold), as well as the duties on cosmetics, some food products including salmon, lamb, chocolate and biscuits, electrical devices and doctors and aerospace products will be significantly lowered.
Expected benefits and economic prospects
As for the imports from India, the United Kingdom agreed to reset import taxes on frozen food products such as scampi and clothing and jewels. According to the British government, the new agreement signed with India applies, on paper, an increase in commercial transactions of about 25 billion (30 billion euros) by 2040, which would lead to an economic growth of an additional 4.8 billion pounds.
Figures to be taken with pliers, given that these are forecasts and which in any case constitute a reduced percentage of the global English economy that last year was worth 2.8 trillion pounds, but should not be underestimated that India lends itself to becoming the third largest world power in the next few years and this is the perspective that most affects Downing Street.
A tortuous road to the final understanding
Of course, on the same admission of the main protagonists of the negotiations, the way to get to the embrace between Keir Starmer and the Indian leader Modi has been dotted with false, unexpected and stall phases. The negotiations, started by the conservatives, had undergone important arrest bars under the Sunak Rishi mandate, considered a fixed -term leader, too weak to offer guarantees of reliability to the Indian counterparty. The intervention with a leg tense in 2022 of the then interior minister Luilla Braveman, concerned about the consequences of the migratory flow deriving from a possible Indian agreement, had caused a long phase of waiting.
Even the former Labor leader, Jeremy Corbyn, had never enjoyed the confidence of the Indians, having proven too close to the positions of Pakistan and Kashmir, but important political signals by the Government of Modes had already come when the Labor were in the opposition. Both Jonathan Reynolds, signatory of the agreement together with the Indian colleague Piyush Goyal, that the current defense minister David Lammy had said they were willing to continue the exchanges started by the Trieste.
It is therefore not surprising that, after Starmer’s ascent to power and following a meeting that took place in November 2024 between the British premier and ways, on the margins of the G20 in Brazil, the negotiations officially resumed in February of this year, to end in May with Reynolds, Goyal and their respective teams, in front of a ice cream cup on a sunny day in Hyde Park.
Creative diplomacy and critical points
Very not very formal detail, which makes the idea well of how different these negotiations have been different from all those with other countries. “Discussing with India is not like dealing with Australia or Canada,” explained one of the members of the British team, “it is a matter of building a complicated personal relationship system. People want to look in your eyes and understand if you can trust ».
There were moments of unexpected creativity, like when Goyal confessed to being a big fan of the TV series Yes Minister And the British made him have an autographed note from one of his authors. And there were moments of tension loosely looked after by an improvised yoga session in the corridor adjacent to the interview room.
Mobility, work and internal criticisms
Who continued so long because the New Delhi government has always advanced important claims on the mobility of people, asking for long -term special permits for professionals who went to work in England and for the students who went to study there. Requests that the Starmer government accepted only minimally, well aware that on this point it would have been attacked by the opposition, but also by the unions, fearful that the arrival of the huge Indian workforce in the country could affect the already precarious balance reached in recent months for many categories of national workers.
So if the agreement will give, in the future, access to the English soil to some professionals such as architects, chefs, yoga instructors and contract musicians who will be able to obtain up to 1,800 permits per year, in the final drafting there are no shortcuts for those who assume Indian workers and Downing Street has already underlined that there will be no change in current migratory policies.
However, a three -year exemption will be operational on the contributions due by the Indian employees who work in the United Kingdom, who instead will limit themselves to paying those requested in their homeland as other foreign workers who operate in England do thanks to similar agreements, signed with European and non -European agreements.
«This does not mean that the Indian employees will be from now on, a more cheap workforce of others. There will be no tax advantages in taking an Indian worker rather than English, indeed it will be the opposite, “he told the BBC, Minister Reynolds.
Words that do not reassure Tom Wills, director of the trade Justice Movement, according to which in the document “sufficient guarantees are not included to protect the rights of workers, the environment and public health”.
The geopolitical perspectives for London and New Delhi
There is no doubt that the agreement is extremely important for India: the government sees in the United Kingdom a lateral access door to the European market, which currently constitutes its most important commercial partner. Brussels and Nuova Delhi have also expressed their intention to want to open a new phase in commercial exchanges by the end of this year.
If the agreement between the two parties were successful, even London, who after Brexit is desperately trying to re -establish the disastrous relationships with the European market, could obtain benefits.
The signing of a bilateral investment treaty with India is still in suspense, to which the British government has for some time aspires for the obvious advantages that the London City would obtain. The negotiations also continue in this direction, but for now it seems unlikely that something concrete is reached.
In fact, one thing is to facilitate imports and exports from both countries, another is to sign a pact of mutual assistance and protection towards investments made by foreigners in the context of their territories. To this, it seems that India of ways is not yet ready.
