New Delhi [India], May 9 (ANI): The recently concluded Free Trade Agreement (FTA) between India and the United Kingdom is expected to benefit both nations economically and could also pave the way for similar agreements with other countries such as the United States and the European Union, says a report by Bank of Baroda.

The report noted that while the UK may not be among India's top trading partners at present, the FTA marks a significant step forward. It sets the stage for deeper trade relations with major global economies and is a strong signal of India's commitment to boosting international trade.

It said, 'While UK per se is not a very significant trading partner for India, this paves the way for similar agreements with other countries like USA and EU and hence, augurs well for India.'

India and the UK have announced the successful conclusion of this mutually beneficial FTA, calling it a modern, comprehensive, and forward-looking agreement.

The report also stated that the deal is aligned with India's long-term vision of becoming a developed nation by 2047 under the 'Viksit Bharat' agenda. It also complements the growth aspirations of both countries.

One of the key highlights of the agreement is the comprehensive market access it provides across various sectors. India will gain from the elimination of tariffs on about 99 per cent of the tariff lines, which covers nearly all of the trade value.

This is expected to open up huge opportunities for Indian exports and significantly boost bilateral trade.

From the UK's side, the government estimates that the deal will increase the country's GDP by Pound 4.8 billion and raise wages by Pound 2.2 billion annually in the long run.

For India, the deal involves removing or reducing tariffs on 90 per cent of tariff lines, covering 92 per cent of goods imported from the UK based on 2022 data. This amounts to tariff cuts worth over Pound 400 million, which could double to around Pound 900 million in 10 years.

One of the important sectors covered under the deal is automobile. UK car manufacturers will benefit from reduced tariffs, which will drop from over per cent to 10 per cent under a quota system.

The report said initially, this will apply to internal combustion engine (ICE) vehicles and later extend to electric vehicles (EVs) and hybrids, aligning with the UK's evolving automotive industry.

Similarly, Indian exporters will also get staged access to the UK market for EVs and hybrids under a quota system, supporting the UK's transition to electric mobility.

Overall, the India-UK FTA is expected to increase trade flows, reduce trading costs, and strengthen economic ties between the two countries while opening up possibilities for future deals with other global partners. (ANI)