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On July 24, India and the UK have signed a Free Trade Agreement in London in the presence of Indian Prime Minister Narendra Modi and UK premier Keir Starmer. The much-awaited Indo-UK FTA marks a milestone in the trade relations between two major economies, setting an ambitious and balanced framework. It unlocks tariff-free access on 99% of Indian exports to the UK, covering nearly 100% of trade value, including labour-intensive sectors advancing the ‘Make in India’ initiative and setting the stage for bilateral trade, which stands at nearly USD 56 billion, to double by 2030. The FTA includes ambitious commitments in goods and services, covering various sectors, while enhancing mobility for Indian professionals by simplifying access for contractual service providers, business visitors, and independent professionals. The innovative Double Contribution Convention will exempt Indian workers and their employers from UK social security contributions for three years, boosting competitiveness and earnings. The Indo-UK FTA has been designed to make trade more inclusive. Women and youth entrepreneurs, farmers, fishermen, startups, and MSMEs will gain new access to global value chains, supported by provisions that encourage innovation, promote sustainable practices, and reduce non-tariff barriers. In the coming years, the FTA is expected to boost trade volumes significantly, creating jobs, expanding exports, and supporting a deeper, more resilient economic relationship between India and the United Kingdom. Of course, by signing this agreement, India and the United Kingdom have taken a major step in building a stronger economic partnership. This agreement marks a significant milestone in India’s engagement with major developed economies and reflects a shared commitment to strengthening economic integration. As the world’s fourth and sixth largest economies respectively, India and the UK’s bilateral engagement holds global economic significance.
There can be no two opinions, this agreement will boost competitiveness of Indian generic medicines in UK market. The zero tariff provisions for generic medicines under this agreement will immensely boost the competitiveness of Indian generic drugs in the UK market. For the pharma industry, this agreement is expected to result in more partnerships in bulk drug production, contract manufacturing and joint research. The trade agreement also comes at a time when the UK is trying to distance itself from the Chinese imports and the Indian products could be a better alternative to replace this market. UK is the second largest importer of Indian drug formulations and biologicals, only after the US. No doubt, this FTA is a landmark agreement that goes beyond tariff reductions, as it signals India’s strategic ascent as a trusted partner in the global healthcare and technology value chain. Besides, this partnership will also open doors for technology transfers, joint ventures, and skilling - which is a key ingredient for building a resilient healthcare ecosystem for both the countries. This Indo-UK FTA marks a pivotal milestone in economic cooperation, particularly in the pharmaceutical sector. With India's pharmaceutical exports to the UK reaching USD 914 million in FY24, the agreement will strengthen supply chain, enhance access to affordable medicines and will drive Foreign Direct Investment. This partnership paves the way for collaborations in bulk drug imports, CDMO, and joint research, empowering India’s competitive edge and promoting global partnerships. Besides trade volumes, what stands out is the scope the FTA will open up in the healthcare sector. With regulatory barriers coming down, Indian healthcare companies will find it easier to operate in the UK, and that can lead to more affordable services and better collaboration between the two systems. Overall, this India-UK FTA will prove to be a booster shot for the Indian pharma and medical devices sectors in the long run.
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