India’s average tariff on British products will drop from 15% to 3%, says UK govt
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India’s average tariff on British products will drop from 15% to 3%, says UK govt
India’s average tariff on British products will drop from 15 per cent to 3 per cent. This is expected to result in a nearly 60 per cent increase in UK exports to India in the long run, amounting to an additional $20 billion in exports. The UK already imports £11 billion worth of goods from India, but liberalised tariffs on Indian goods will make it easier and cheaper to buy Indian products. For businesses, this could mean potential savings when importing components and materials used in sectors such as advanced manufacturing.
New Delhi, often criticised for being a high-tariff country — especially by US President Donald Trump — has started reducing tariffs for Western trading partners to improve economic integration and boost exports, particularly in labour-intensive sectors such as textiles and leather goods.
“A reduction in tariffs, combined with a reduction in regulatory barriers to trade between the UK and India, is 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. It will also 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 UK government said in a statement.
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As many as 26 British companies have secured new business in India, the statement added.
“Airbus and 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,” it said.
The UK already imports £11 billion worth of goods from India, but liberalised tariffs on Indian goods will make it easier and cheaper to buy Indian products. For businesses, this could mean potential savings when importing components and materials used in sectors such as advanced manufacturing or luxury and consumer goods.
Meanwhile, India will benefit from tariff elimination on approximately 99 per cent of tariff lines, covering nearly 100 per cent of trade value — offering opportunities to boost bilateral trade between India and the UK, according to the Commerce and Industry Ministry.
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The pact includes chapters on goods, services, innovation, government procurement, and intellectual property rights. The two countries have also concluded negotiations on the Double Contribution Convention Agreement, or social security pact, which would help avoid double contributions to social security funds by Indian professionals working for a limited period in Britain. However, talks on the Bilateral Investment Treaty (BIT) are still ongoing.