What is Expected to Get Cheaper as India & UK Conclude Free Trade Agreement?
The recently-concluded India-UK Free Trade Agreement (FTA) has sent shockwaves across the global economy, particularly in the industries that stand to gain from the reduced tariffs. The agreement, which was signed on October 24, 2021, is expected to have a significant impact on the prices of various goods and services traded between the two nations. In this blog post, we will explore what is expected to get cheaper as a result of the FTA.
Distilled Spirits to Get Cheaper
One of the most significant benefits of the FTA is the reduction in tariffs on distilled spirits. Currently, tariffs on gin and whisky stand at 150%, making them an expensive luxury in India. However, with the new agreement, these tariffs are expected to be halved to 75%. This means that UK-imported gin and whisky will become cheaper, making them more accessible to Indian consumers.
The reduction in tariffs will not only benefit consumers but also the Indian hospitality industry. Restaurants and bars will be able to offer a wider range of spirits to their customers, which will boost their revenue and help them stay competitive in the market.
Automotive Tariffs to Come Down
Another significant aspect of the FTA is the reduction in automotive tariffs. Currently, tariffs on UK-imported vehicles stand at 100%, making them an expensive option for Indian consumers. With the new agreement, these tariffs are expected to be cut to 10%. This means that UK-imported vehicles will become cheaper, making them a more attractive option for Indian consumers.
The reduction in tariffs will not only benefit consumers but also the Indian automotive industry. Domestic players will face increased competition, which will drive innovation and improvement in product quality. This will ultimately benefit Indian consumers, who will have access to better and cheaper vehicles.
Cosmetics, Chocolates, and Soft Drinks to Get Cheaper
The FTA also covers a range of other goods, including cosmetics, chocolates, soft drinks, electrical machinery, and biscuits. These goods are expected to face lower tariffs, making them cheaper for Indian consumers.
Cosmetics, for instance, are currently subject to tariffs of up to 30%. With the new agreement, these tariffs are expected to come down, making a wider range of cosmetics available to Indian consumers. This will not only benefit consumers but also the Indian beauty and personal care industry, which is expected to grow significantly in the coming years.
Chocolates are another common good that will benefit from the FTA. Currently, tariffs on chocolates stand at up to 30%. With the new agreement, these tariffs are expected to come down, making a wider range of chocolates available to Indian consumers. This will not only benefit consumers but also the Indian confectionery industry, which is expected to grow significantly in the coming years.
Soft drinks, including carbonated beverages and juices, are also expected to face lower tariffs. This means that Indian consumers will have access to a wider range of soft drinks at cheaper prices. This will not only benefit consumers but also the Indian beverage industry, which is expected to grow significantly in the coming years.
Electrical Machinery and Biscuits to Get Cheaper
Electrical machinery, including appliances and electronics, is another category of goods that will benefit from the FTA. Currently, tariffs on electrical machinery stand at up to 20%. With the new agreement, these tariffs are expected to come down, making a wider range of electrical machinery available to Indian consumers at cheaper prices.
Biscuits are another common good that will benefit from the FTA. Currently, tariffs on biscuits stand at up to 30%. With the new agreement, these tariffs are expected to come down, making a wider range of biscuits available to Indian consumers at cheaper prices.
Conclusion
The India-UK Free Trade Agreement is expected to have a significant impact on the prices of various goods and services traded between the two nations. With the reduction in tariffs on distilled spirits, automotive, cosmetics, chocolates, soft drinks, electrical machinery, and biscuits, Indian consumers can expect to see cheaper prices on these goods. This will not only benefit consumers but also the Indian industries that produce and trade these goods.
The FTA is a significant step forward for India and the UK, and it is expected to have a positive impact on the economies of both nations. As the two nations continue to grow and develop their economies, the FTA will play an important role in promoting trade and investment between them.
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