What is expected to get cheaper as India & UK conclude Free Trade Agreement?
The world economy has witnessed several significant developments in recent times, and one of the most recent ones is the conclusion of a Free Trade Agreement (FTA) between India and the United Kingdom. The FTA, which was signed on May 21, 2022, marks a major milestone in the economic relationship between the two nations. The agreement is expected to bring significant benefits to both countries, particularly in terms of trade and commerce.
As the agreement comes into effect, several UK goods are expected to become cheaper in India, making them more competitive in the domestic market. In this blog post, we will explore some of the key goods that are expected to benefit from the FTA and what this means for consumers and businesses alike.
Distilled Spirits
One of the most significant benefits of the FTA is the reduction in tariffs on distilled spirits, including gin and whisky. Currently, tariffs on these products stand at 150%, making them one of the most expensive spirits in the world. With the FTA, these tariffs will be halved to 75%, making these spirits more affordable for Indian consumers.
This is great news for Indian spirits enthusiasts, who have been complaining about the high prices of imported spirits. With the reduction in tariffs, British gin and whisky brands such as Bombay Sapphire, Hendrick’s, and Glenfiddich are expected to become more competitive in the Indian market.
Automobiles
Another significant sector that will benefit from the FTA is the automotive industry. Currently, tariffs on UK-imported vehicles stand at 100%, making them much more expensive than similarly priced vehicles imported from other countries. With the FTA, these tariffs will be reduced to 10%, making UK-imported vehicles more competitive in the Indian market.
This is great news for Indian car buyers, who have been looking for more affordable options in the market. With the reduction in tariffs, UK brands such as Jaguar, Land Rover, and Rolls-Royce are expected to become more competitive in the Indian market, offering consumers a wider range of choices.
Cosmetics, Chocolates, and Soft Drinks
In addition to distilled spirits and automobiles, several other UK goods are expected to benefit from the FTA. These include cosmetics, chocolates, and soft drinks, which will see a reduction in tariffs from 20% to 5%. This is expected to make these products more competitive in the Indian market, particularly among Indian consumers who are known for their love of beauty products and confectionery.
Electrical Machinery and Biscuits
Other UK goods that will benefit from the FTA include electrical machinery and biscuits. Tariffs on these products will be reduced from 15% to 5%, making them more competitive in the Indian market.
What does this mean for consumers and businesses?
The conclusion of the FTA is expected to have significant benefits for both consumers and businesses. For consumers, it means lower prices on a range of UK goods, including distilled spirits, automobiles, cosmetics, chocolates, soft drinks, electrical machinery, and biscuits.
For businesses, the FTA is expected to increase trade between the two countries, creating new opportunities for exporters and importers alike. It is also expected to attract more foreign investment to India, particularly in the manufacturing sector.
Conclusion
The conclusion of the India-UK Free Trade Agreement marks a significant milestone in the economic relationship between the two nations. The agreement is expected to bring significant benefits to both countries, particularly in terms of trade and commerce.
As we wait to see the full impact of the FTA, one thing is clear: consumers and businesses alike are expected to benefit from the reduced tariffs on a range of UK goods. Whether you’re a spirits enthusiast, a car buyer, or simply a consumer looking for affordable options, the FTA is expected to bring more choices and better value for money.
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