What is Expected to Get Cheaper as India & UK Conclude Free Trade Agreement?
In a significant development, India and the United Kingdom have recently concluded a Free Trade Agreement (FTA), which is expected to bring numerous benefits to both countries. One of the most notable aspects of this agreement is the reduction in tariffs on various goods, making them cheaper for Indian consumers. In this blog post, we’ll delve into the details of what’s expected to get cheaper as a result of this agreement.
Distilled Spirits: A Significant Reduction in Tariffs
The first notable benefit of the India-UK FTA is the reduction in tariffs on distilled spirits, including gin and whisky. Currently, tariffs on these products stand at 150%, but they are expected to be halved to 75%. This move is expected to make these popular beverages cheaper for Indian consumers. For instance, a bottle of gin that costs around ₹1,500 ($20) currently may now cost around ₹750 ($10) or even lower, depending on the brand and quality.
Automotive Sector: Cheaper UK-Imported Vehicles
Another significant area that will benefit from the FTA is the automotive sector. Currently, tariffs on UK-imported vehicles stand at 100%, but they are expected to be slashed to 10%. This reduction in tariffs will make UK-imported vehicles cheaper for Indian consumers. For instance, a Toyota or Honda car that costs around ₹20 lakh ($27,000) currently may now cost around ₹15 lakh ($20,000) or even lower, depending on the model and features.
Other UK Goods: Lower Tariffs on Cosmetics, Chocolates, and More
In addition to distilled spirits and vehicles, several other UK goods will also benefit from lower tariffs. These include:
- Cosmetics: Tariffs on cosmetics are expected to be reduced from 10% to 2.5%. This will make popular UK brands like L’Oréal and Unilever cheaper for Indian consumers.
- Chocolates: Tariffs on chocolates are expected to be reduced from 30% to 10%. This will make popular UK brands like Cadbury and Hershey’s cheaper for Indian consumers.
- Soft drinks: Tariffs on soft drinks are expected to be reduced from 10% to 2.5%. This will make popular UK brands like Coca-Cola and Pepsi cheaper for Indian consumers.
- Electrical machinery: Tariffs on electrical machinery are expected to be reduced from 10% to 2.5%. This will make popular UK brands like Philips and Siemens cheaper for Indian consumers.
- Biscuits: Tariffs on biscuits are expected to be reduced from 30% to 10%. This will make popular UK brands like McVitie’s and Jacob’s cheaper for Indian consumers.
What Does This Mean for Indian Consumers?
The reduction in tariffs on these goods will have several benefits for Indian consumers. Firstly, it will increase the availability of a wider range of products at competitive prices. This will give Indian consumers more choices and better deals on the products they desire. Secondly, the reduction in tariffs will also lead to an increase in trade between India and the UK, which will create new job opportunities and stimulate economic growth.
What Does This Mean for Indian Businesses?
The reduction in tariffs will also have several benefits for Indian businesses. Firstly, it will make it easier for Indian businesses to import goods from the UK, which will reduce their costs and increase their competitiveness. Secondly, the reduction in tariffs will also make it easier for Indian businesses to export goods to the UK, which will increase their revenue and create new job opportunities.
Conclusion
The India-UK Free Trade Agreement is a significant development that will bring numerous benefits to both countries. The reduction in tariffs on distilled spirits, vehicles, and other goods will make these products cheaper for Indian consumers. For Indian businesses, the reduction in tariffs will make it easier to import and export goods, which will increase their competitiveness and create new job opportunities. As the two countries continue to work together, we can expect to see even more benefits from this agreement in the future.
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