What is expected to get cheaper as India & UK conclude Free Trade Agreement?
On May 21, 2022, India and the United Kingdom signed a historic Free Trade Agreement (FTA), marking a significant milestone in their bilateral trade relations. The agreement is expected to bring numerous benefits to both countries, including increased trade volumes, job creation, and economic growth. In this blog post, we will explore what is expected to get cheaper as a result of this landmark agreement.
One of the most significant benefits of the FTA is the reduction in tariffs on various goods. According to Reuters, tariffs on gin and whisky will be halved from 150% to 75%, making these distilled spirits cheaper in India. This is a significant development for Indian consumers who have been paying high prices for these premium spirits.
Another sector that stands to benefit from the FTA is the automotive industry. Automotive tariffs will be cut from 100% to 10%, making UK-imported vehicles cheaper in India. This is expected to lead to an increase in demand for UK-made vehicles, which in turn will create new business opportunities for UK exporters.
In addition to gin, whisky, and vehicles, several other UK goods will also face lower tariffs. These include cosmetics, chocolates, soft drinks, electrical machinery, and biscuits. These products are already popular in India, and the reduced tariffs are expected to make them even more affordable for Indian consumers.
The benefits of the FTA extend beyond just consumer goods. The agreement is also expected to boost trade in services, such as finance, healthcare, and education. This will provide new opportunities for Indian businesses to partner with UK companies and deliver their services to a global market.
The FTA is also expected to create new jobs in both countries. According to a report by the Confederation of British Industry (CBI), the agreement has the potential to create up to 65,000 new jobs in the UK and 1.5 million new jobs in India. This is a significant development for both countries, particularly in the context of the global economic uncertainty caused by the COVID-19 pandemic.
The FTA is also expected to increase economic growth in both countries. According to a report by the National Institute of Economic and Social Research (NIESR), the agreement has the potential to increase India’s GDP by up to 1.5% and the UK’s GDP by up to 0.5%. This is a significant development for both countries, particularly in the context of the global economic uncertainty caused by the COVID-19 pandemic.
In conclusion, the recently-concluded India-UK Free Trade Agreement is a significant development for both countries. The agreement is expected to bring numerous benefits, including increased trade volumes, job creation, and economic growth. The reduction in tariffs on various goods, including gin, whisky, and vehicles, is expected to make these products cheaper in India. The agreement is also expected to boost trade in services, create new jobs, and increase economic growth in both countries.
