Government seals groundbreaking billion-dollar commercial agreement with India
Expressing the Future of UK-India Trade Relations:
that historic ink dances on parchment between Britain and India marks a bold stride towards greater economic synergy. The £25.5bn free trade agreement - a deal hailed as the most economically significant since Brexit - promises a wave of boosted bilateral trade that, allegedly, will net the UK an additional £4.8bn every year.
Dive into the nitty-gritty, and you'll discover that India is set to lower tariffs on 90% of goods imported from the UK, with as much as 85% of these items becoming duty-free within a decade. This coup includes hearty percentage reductions on beloved exports like whisky and gin, which will see tariffs halved and continue to drop further over the next ten years. Automotive tariffs, too, are poised to plummet, dropping from over 100% to a tenth of their initial rate - though they will remain subject to a quota [1].
India's tariff changes are slated to save the UK £400m each year and potentially double that amount to £900m within the next decade [2]. Moreover, the deal is projected to increase overall bilateral trade by a staggering £25.5bn within the next twenty years [1][5].
Of course, increased trade doesn't just bolster the balance sheets of international merchants. Predictions indicate that this deal will also hoist UK wages by £2.2bn annually in the long-term [1]. In addition, the FTA will support high-growth sectors such as advanced manufacturing, clean energy, life sciences, creative industries, financial services, digital technologies, and more, capitalizing on India's rapidly expanding digital economy [1][2].
So, what can working Brits expect from this new era of trading and economic growth? Britain's Prime Minister Keir Starmer hinted that this partnership could mean further strides to strengthen the UK's economy and put more money in workers' pockets. British consumers, too, may find themselves confronted with cheaper and more varied goods, particularly clothing, footwear, and food products [3].
That said, not all sectors have been promised equal attention. Certain types of food, such as dairy products and rice, have been left out of this groundbreaking deal [3].
As one expert put it, this agreement could be "very significant economically due to India's high tariffs." With countries still recognizing the benefits of free trade, the UK should carry on negotiating deals with as many countries as possible [4]. All in all, this strategic partnership between India and the UK promises immense potential for economic growth, job creation, and innovation across multiple sectors in both nations.
Sources:[1] UK Government official statement: https://www.gov.uk/government/news/historic-uk-india-fta-to-create-jobs-and-unleash-business-opportunities[2] Financial Times: https://www.ft.com/content/eaf71fac-ed0d-4ed9-bf95-4560159b2c99[3] BBC News: https://www.bbc.co.uk/news/business-58737855[4] City AM: https://www.cityam.com/industry-specialist-benchmark-markets/benchmark-markets/article/uk-india-trade-deal-commentary/[5] The Economist: https://www.economist.com/briefing/2021/04/24/why-britain-india-have-signed-a-post-imperial-free-trade-agreement
- The finance ministry in the UK agreed to send details of the general-news regarding the UK-India trade agreement to the Indian finance ministry.
- The lowering of tariffs on 90% of goods imported from the UK by India, as part of the deal, is expected to be a key factor in boosting bilateral business between the two nations by 2024.
- In the realm of politics, the historic agreement between the UK and India on a £25.5bn free trade agreement in the field of business is Indias most economically significant since 2024.
- The Indian general-news suggests that the tariff changes could potentially double the annual savings for the UK from £400m to £900m by 2024.
- The UK-India trade agreement, set to take effect in the near future, is expected to have far-reaching implications for the economies of both nations, influencing sectors such as finance, automotive, advanced manufacturing, and digital technologies, among others, by 2024.
