The UK has started negotiations with India into developing an ambitious free trade agreement (FTA). he UK Government has stated that the agreement would:
- Create huge benefits for both countries and could boost our total trade by up to £28 billion a year by 2035 and increase wages by up to £3 billion across the UK
The UK wants an agreement that would eliminate barriers to trade between the two countries. The Government summarises the benefits as follows:
- Reduced barriers to trade in goods. Trade will be made easier and cheaper for UK exporters while improving choice and value for UK consumers. Removal of India’s tariffs on imports would save British companies money and increase the competitiveness of UK products. UK exports such as Scotch whisky and cars currently face duties of 150% and 125% respectively. The removal of tariffs and the provision of greater legal certainty by an FTA would support UK businesses in industries keen to export to India such as the automotive, agri-food, machinery and pharmaceutical industries.
- Increased opportunities for UK services and investment.
- Supporting innovation and trade in a digital era. An FTA presents an opportunity for British and Indian businesses to pioneer innovative commercial ventures in fields such as emerging tech, artificial intelligence, and cybersecurity
- More jobs for UK workers. International investment from Indian companies already supports 95,000 jobs across the UK and this could increase with a new trade deal.
- Helping small and medium-sized enterprises. SMEs in particular stand to benefit from the increased transparency and reduced costs an FTA could provide while lower importing costs would lead to the further growth of businesses of all sizes across the UK.
- Boost to the UK’s green industries. The Indian Government is planning to install 175 GW of renewable energy capacity by 2022 and more in the coming decades. The UK’s renewables industry would benefit from a deal that removed barriers such as import tariffs as high as 15% on wind turbine parts from the UK.
its likely that these discussions could take months to negotiate and once we have more developments on this we will update this article. More information can be found at UK launches India negotiations to kick off 5-star year of trade – GOV.UK (www.gov.uk)
