Caution and optimism: India’s FTA with United Kingdom

Free Trade Agreement between India and United Kingdom (FTA) There is a strong step towards securing India’s bilateral relations in a rapidly fragmented global trade environment. The main attraction for India is that 99% of its exports will not have any duty. In addition to industry associations representing engineering goods, apparel, and gems and jewelery by business leaders, each of the top Indian exports in the UK has expressed strong optimism for future trade development. For example, engineering exports are expected to export engineering according to the Engineering Exports Promotion Council of India by almost double $ 7.55 billion by 2029–30. Overall bilateral trade is expected to double by $ 120 billion by 2030. The other major victory is that Indian workers are temporarily working in the UK and their employers will be exempted from giving social security contribution for three years. It is likely to hire Indian workers in the UK, the FTA also reduces the movement of professionals and investors, which must go into some way to revive India’s flag bearer foreign direct investment levels. On the other hand, India has agreed to cut its tariff at 90% of the tariff lines imported from Britain, out of which 85% of which have been reduced to zero tariffs within a decade. While the decrease in automotive tariffs is unlikely to change the value-conscious behavior of Indians meaningfully, the whiskey and the import duties on which the slashing of imports will increase competition in India and will probably slow down the ongoing premium trend.

Although the Modi government is quick to criticize the FTA signed by the UPA, which is to harm India, but some of its FTAs ​​have faced this issue. For example, the India-UAE CEPA (2022) has seen India’s trade balance deteriorating over the years. Along with Australia, FTA is also not profitable for Indian exports. Indian Farmers’ Organization – In protest against the UK FTA since the introduction of talks – lambs and salmon and other food products are weapons on low tariffs. Here, the government should also work to ensure that the farmers of India are already low-income, in low-margins, are not elbow. Then, it is the fact that business experts agree that the Indo-UK FTA will be temporated for future agreements with the European Union and US India should be careful here. While the UK is a relatively small trading partner, the European Union and the US Deal – when they are – will have a more significant impact. India has already cut import duties on many food and auto products in accordance with American demands. With less than 2% contribution to global exports, Indian manufacturing needs to help, not less.