The trade agreement between India and the UK is well-timed in light of changes in global supply. With reciprocal access on many Indian exports, it seeks to liberalise tariffs on about 90% of UK imports.
Benefits
Export diversification: By having easier access to UK and EU markets, Indian exporters are protected from the demands of US tariffs.That is really a huge relief.
Growth in high-value sectors: Improved market access and standard alignment might help Indian industries including engineered goods, medicines and services.
Increased investment: In order to take advantage of duty-free supply chains, UK companies may make investments in Indian manufacturing industries resulting in new job opportunities and technological transfer in the domain.
Increasing international ties: This improves India’s strategic alignment with the UK and creates opportunities for defence, technology and research & development collaboration.
Challenges:
Compliance burden: MSMEs may find it difficult to adhere to UK regulations about quality, origin and standards of products & services.
Phased liberalisation: Over the years, some industries will have their tariffs gradually removed postponing any immediate benefits.
Trade imbalances: India’s import control may be challenged if the UK maintains its influence over important industrial inputs.Delays in political ratification: Domestic and UK legislative approvals are necessary for the deal to have its benefits.
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About the Author: Jyoti Verma
