What is expected to get cheaper as India & UK conclude Free Trade Agreement?
The recent conclusion of the India-UK Free Trade Agreement (FTA) has sent shockwaves of excitement across the business and trade communities in both countries. The agreement, signed on May 21, 2022, promises to reduce tariffs on a wide range of goods and services, making them cheaper and more accessible to consumers and businesses alike. In this blog post, we will delve into the details of the agreement and explore what is expected to get cheaper as a result of this new trade pact.
First and foremost, let’s talk about the big winners in this deal – the distilled spirits industry. Gin and whisky lovers in India can rejoice, as tariffs on these products are set to be halved from 150% to 75%. This means that the prices of these popular drinks are expected to come down significantly, making them more affordable for Indian consumers. This is a huge win for the spirits industry, which has been facing stiff competition from other countries with lower tariffs.
The automotive sector is another big beneficiary of the India-UK FTA. Tariffs on UK-imported vehicles will be cut from 100% to 10%, making them cheaper for Indian consumers. This is a significant reduction, and it is expected to boost car sales in India. In fact, the Society of Motor Manufacturers and Traders (SMMT) has estimated that the agreement will save Indian consumers around £1,000 (approximately ₹94,000) per vehicle.
But it’s not just cars and spirits that will benefit from the agreement. Other UK goods that will face lower tariffs include cosmetics, chocolates, soft drinks, electrical machinery, and biscuits. These products will become cheaper and more competitive in the Indian market, giving UK businesses a competitive edge over their rivals.
So, what does this mean for Indian consumers? In short, it means that they can expect to pay lower prices for a wide range of goods and services. This is particularly good news for low- and middle-income households, who will benefit from the increased affordability of these products. The agreement will also create new job opportunities and stimulate economic growth, as UK businesses invest in India and Indian businesses export more goods to the UK.
But what about the Indian businesses that will be affected by the agreement? While some may face increased competition from cheaper imports, others will benefit from the increased exports to the UK. The agreement will also create new opportunities for Indian businesses to invest in the UK and vice versa, creating new job opportunities and driving economic growth.
The India-UK FTA is also expected to have a positive impact on the Indian economy as a whole. The agreement is expected to increase India’s exports to the UK by around 12%, which will help to reduce the country’s trade deficit. This will also help to boost India’s economic growth, which has been slowing down in recent years.
In conclusion, the India-UK FTA is a significant agreement that will have far-reaching benefits for both countries. The reduction in tariffs on distilled spirits, automotive, and other goods will make them cheaper and more accessible to consumers and businesses alike. The agreement will also create new job opportunities, stimulate economic growth, and increase trade between the two countries.
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