FTA: India to lower average tariff on British goods to 3% from 15%
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FTA: India to lower average tariff on British goods to 3% from 15%
India will reduce its average tariff on products from the United Kingdom to 3 percent from 15 percent. The deal will increase UK’s exports to India by nearly 60 percent in the long run, equivalent to an additional £15.7 billion when applied to projections of future trade in 2040. Bilateral trade between India and the UK is expected to increase nearly 39 percent to £25.5 billion a year, when compared to 2040 projected levels in the absence of an agreement.
India will reduce its average tariff on products from the United Kingdom to 3 percent from 15 percent through the free trade agreement (FTA) the two countries will sign on July 24, the British government said.
The agreement would be signed as Prime Minister Narendra Modi, who is on a two-day visit to the UK, meets his British counterpart Keir Starmer.
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The deal will increase UK’s exports to India by nearly 60 percent in the long run, equivalent to an additional £15.7 billion when applied to projections of future trade in 2040.
Bilateral trade between India and the UK is expected to increase nearly 39 percent in the long run to £25.5 billion a year, when compared to 2040 projected levels in the absence of an agreement, the British government added.
India will eliminate tariffs on aerospace goods from as high as 11 percent, while duties on electrical machinery will be either lowered or eliminated from up to 22 percent, the British government said.
India will also either eliminate or halve tariffs on a range of medical devices, between 8.25 percent to 13.75 percent, within ten years.
Whisky producers will benefit from halving of tariffs, to be reduced immediately from 150 percent to 75 percent and then dropped further to 40 percent over the next 10 years, it said. Duties on automobiles would be lowered to 10 percent gradually under a quota from 110 percent before.
“The UK already imports £11 billion in goods from India, but liberalised tariffs on Indian goods will make it easier and cheaper to buy their best products. For businesses, this could mean potential savings when importing components and materials used in areas such as advanced manufacturing or luxury and consumer goods,” the British government said in a statement.
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Indian exports are also set to benefit from duty elimination on about 99 percent of the tariff lines, covering almost 100 percent of the trade value, especially aiding labour-intensive shipments of textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery.
India has been able to exclude sensitive items such as dairy products, apples and cheese from the FTA with the UK.
FTA set to reduce average tariffs on UK goods into India from 15% to 3%: UK statement
India’s average tariff on UK products will drop from 15% to 3% under to-be-signed India-UK FTA. British whisky producers will benefit from tariffs slashed in half, reduced immediately from 150% to 75%. UK workers will enjoy a collective uplift in wages of £2.2 billion each year and could also see cheaper prices and more choice on clothes, shoes, and food products. Both nations desire to increase their trade to USD 120 billion by 2030, according to India’s Ministry of Commerce and Industry. The UK already imports £11 billion in goods from India, but liberalised tariffs on Indian goods will make it easier and cheaper to buy their best products, the UK statement said. The deal is expected to increase bilateral trade by nearly 39 per cent in the long run, equivalent to £25.5 billion a year, when compared to 2040 projected levels of trade in the absence of an agreement, it added.
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The UK statement asserted that British companies selling products to India — from soft drinks and cosmetics to cars and medical devices — will find it easier to sell to the Indian market.
Further, British whisky producers will benefit from tariffs slashed in half, reduced immediately from 150 per cent to 75 per cent and then dropped even further to 40 per cent over the next ten years – giving the UK an advantage over international competitors in reaching the Indian market, the UK statement noted.
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“Our landmark trade deal with India is a major win for Britain. It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country, delivering on our Plan for Change,” Starmer said in the statement.
The statement added that the British Prime Minister will welcome nearly £6 billion in new investment and export wins, which will create over 2,200 British jobs across the country as Indian firms expand their operations in the UK and British companies secure new business opportunities in India.
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The UK statement further added that these deals will drive jobs in high-growth sectors like aerospace, technology and advanced manufacturing – supporting engineers, technicians and supply chain workers, in every corner of the UK.
It also asserted that British workers will enjoy a collective uplift in wages of £2.2 billion each year and could also see cheaper prices and more choice on clothes, shoes, and food products.
The UK already imports £11 billion in goods from India, but liberalised tariffs on Indian goods will make it easier and cheaper to buy their best products, it added. “For businesses, this could mean potential savings when importing components and materials used in areas such as advanced manufacturing or luxury and consumer goods.”
A reduction in tariffs, combined with a reduction in regulatory barriers to trade between the UK and India are estimated to increase UK exports to India by nearly 60 per cent in the long run – this is equivalent to an additional £15.7 billion of UK exports to India when applied to projections of future trade in 2040.
Also, it is expected to increase bilateral trade by nearly 39 per cent in the long run, equivalent to £25.5 billion a year, when compared to 2040 projected levels of trade in the absence of an agreement.
“The clean energy industry will have brand new, unprecedented access to India’s vast procurement market as the country makes the switch to renewable energy and continues to see growing energy demand,” the UK statement, referring to India’s ambitious green transition goal.
Meanwhile, 26 British companies have secured new business in India, the UK statement noted.
Airbus & Rolls-Royce will soon begin delivering Airbus aircraft – with over half powered by Rolls-Royce engines – to major Indian airlines as part of around £5 billion worth of contracts recently agreed.
On May 6, Prime Minister Modi and his UK counterpart Keir Starmer announced the successful conclusion of a mutually beneficial India – UK Free Trade Agreement (FTA). This forward-looking Agreement is aligned with India’s vision of Viksit Bharat 2047 and complements the growth aspirations of both the countries.
Commerce and Industry Minister Piyush Goyal is also in London for the crucial trade deal signing ceremony.
The idea behind the trade deal is to eliminate or reduce tariffs on imports and exports between the two nations. This should make Indian products competitive in the UK and vice versa. Both nations desire to increase their trade to USD 120 billion by 2030.
The FTA is expected to boost key sectors such as textiles, leather, footwear, sports goods and toys, marine products, gems and jewellery, engineering goods, auto parts and engines, and organic chemicals.
“The FTA ensures comprehensive market access for goods, across all sectors, covering all of India’s export interests. India will gain from tariff elimination on about 99% of the tariff lines covering almost 100% of the trade value offering huge opportunities for increase in the bilateral trade between India and the UK,” India’s Commerce and Industry Ministry had said in its release on May 6. (ANI)
(This content is sourced from a syndicated feed and is published as received. The Tribune assumes no responsibility or liability for its accuracy, completeness, or content.)