NewKerala.com

Key Points

The India-UK FTA marks a major step in expanding trade relations, with benefits spanning multiple sectors. The deal is expected to significantly boost bilateral trade while setting a precedent for future agreements with the US and EU. Both nations stand to gain economically, with India eyeing long-term growth under the Viksit Bharat initiative. The agreement also supports the UK's transition to electric mobility through tariff reductions.

Key Points: India UK FTA Boosts Trade Prospects With US and EU Says Bank of Baroda

  • India-UK FTA eliminates tariffs on 99% of trade value
  • Deal to boost UK GDP by £4.8 billion annually
  • Automobile sector gains with reduced tariffs on EVs
  • Aligns with India's Viksit Bharat 2047 economic vision
3 min read

India UK FTA paves way for similar agreements with countries like USA, EU: Bank of Baroda

India-UK trade deal sets stage for future agreements with US and EU, boosting exports and economic growth under Viksit Bharat vision.

"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. – Bank of Baroda"

New Delhi, May 9

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 £4.8 billion and raise wages by £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 £400 million, which could double to around £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

Share this article:

Reader Comments

R
Rajesh K.
This is a great step forward! 🇮🇳 The UK FTA will open doors for our MSME sector and create more jobs. Hope our government negotiates similar favorable terms with EU and USA too. Make in India getting global recognition!
P
Priya M.
While the deal looks promising, I hope our domestic industries are protected. Sometimes FTAs flood our markets with foreign goods. The EV sector needs special attention - we shouldn't become just an assembly hub for foreign auto companies.
A
Amit S.
British cars becoming cheaper is good news! But will Indian manufacturers get equal access to UK markets? The report mentions staged access - hope this doesn't mean our products face hidden barriers while theirs get red carpet treatment.
S
Sunita R.
As a small business owner exporting handicrafts, this excites me! 🎨 The 99% tariff elimination could be game-changing. But government should conduct workshops to help small exporters understand and benefit from these new rules. Many like me find FTA paperwork confusing.
V
Vikram J.
The 'Viksit Bharat 2047' vision needs such strategic partnerships. However, we must ensure technology transfer happens in key sectors like EVs. Mere tariff reductions won't help - we need knowledge sharing to build indigenous capabilities.
N
Neha P.
Good move overall, but what about services sector? Many Indian professionals face visa issues in UK. Hope next round of talks addresses this - our IT and healthcare workers contribute significantly to their economy too!

We welcome thoughtful discussions from our readers. Please keep comments respectful and on-topic.

Leave a Comment

Minimum 50 characters 0/50