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India and the UK have finalized an important free trade agreement.
The deal represents the UK’s largest post-breaked trade system.
Bilateral trade is estimated to grow $ 34 billion by 2040.
New Delhi:
India and the United Kingdom have signed a historic free trade agreement. It is outside the UK’s most important post-breaked deal and out of India’s first Asia and Australia. Trade talks between India and Britain have been going on for many years, but gained momentum in the shadow of US President Donald Trump’s global tariff order.
India, which is currently the fifth largest economy in the world and Britain, which is the sixth largest, will greatly benefit from this bilateral trade system. The two countries aim to increase bilateral trade by $ 34 billion by 2040.
What did the Prime Ministers say
Appreciating the treaty, Prime Minister Narendra Modi said, “These historical agreements will deepen our widespread strategic partnership, and catalyze business, investment, development, employment generation and innovation in our economies.”
The UK Prime Minister Kir Stmper also praised the achievement, saying, “Now we are in a new era for trade and economy. This means that to strengthen Britain’s economy, go ahead and faster.” He said that “strengthening our alliances and reducing business obstacles with economies around the world is part of our plan to give a strong and more secure economy at home.”
Which areas benefit
Under the historic agreement, India and the UK will achieve liberal market access and reduce trade restrictions. Under this new bilateral agreement, the most profitable areas are food processing, F&B, alcobev and automobiles.
The lamb will rapidly reduce tariffs on goods such as salmon, chocolate, biscuits and whiskey. The deal also secures quota for both countries on automobiles and parts imports. In a significant change in its policy, New Delhi has given more markets to UK firms, especially in the automobile sector. It may suggest a change in the trend that India is also interacting with the United States and the European Union for similar trade deals.
India is the largest whiskey market in the world and whiskey and on which tariffs will be reduced from 150 percent to 75 percent under this agreement. By the tenth year of the deal, they will fall by 40 percent.
Under this deal, India has agreed to slash the levy with 90 percent of British products sold in the country, from medical equipment to machinery, with 85 percent of people being tariff-free within a decade. The motor vehicle industry will have a large -scale tariff cut from the current 100 percent to 10 percent.
Other industries that will achieve extremely under trade agreement are cosmetics, aerospace, electrical machinery and soft beverages.
It is estimated that India’s tariff cut will be more than 400 million pounds, which will exceed 800 million pounds in a decade.
Britain has also agreed to reduce its own tariffs on certain products, leading to 99 percent of Indian exports being facing zero duties. One of the Indian industries that will be the most benefiting is the textile industry, all of which are removed. There are millions of Indians working in the textile sector.
Other Indian regions who will benefit from trade deal: sea products, leather, sports goods, toys, gems and jewelery, engineering goods and auto parts.
Hurdles
The talks between New Delhi and London for a free trade agreement began in January 2022. The talks faced several obstacles and extended periods where no progress was made. One of the reasons for this was a continuous change in the government in Britain, in which four Prime Ministers took over in four years. India also saw elections last year.
The two countries are interacting with the United States as to whether the tariffs imposed by Donald Trump can be reduced. New Delhi and London also seek free trade treaty with the US, which is a major trading partner for both.
