India and UK made landmark FTA
India and UK made landmark Free Trade Agreement (FTA) on 6th May. Both of the Prime Ministers Narendra Modi of India and UK Prime Minister Keir Starmer announced it. On the atmosphere of ongoing high tariff imposition and counter imposition of it among some countries that initiated by the US the formation of
FTAs among countries are thought to be helpful for the world economy.
How does FTAs help?
India has been a laggard country in making FTAs either in regional levels or distant levels. Some well known economists expressed their opinions about it and said that unless India was involved in entering
several FTAs, its economic prosperity would not be according to its potentials. Even some smaller countries like Vietnam have already been benefited hugely by entering into FTAs. At present, to get the
benefit of lowest cost in producing goods every country has to take advantage of supply chain. So, entry into FTAs is a precondition to reaping the benefit of supply chains. By utilizing the supply
chain, an economy can get different inputs of a product from those countries where these inputs are produced at lowest costs. Then the products can be sold through the supply chains at competitive rates
to different countries under FTAs.
The benefits of the FTA between India and UK
The release by the Commerce and Industry Ministry said that the FTA ensures “India will gain from tariff elimination on about 99% of the tariff lines covering almost 100% of the trade value offering
huge opportunities for increase in the bilateral trade”. India has agreed to cut rates of 90% of tariff lines from UK. But it will be done gradually. Likewise 99% Indian exports to benefit from zero duty in
the UK market. The deal is expected to double bilateral trade by 2030. In 2024 the trade between two countries rose to $21.34 billion.
Items of trade to get benefit
Britain can sell whisky, gin, and automotive imports by reduction in tariff. On the other hand, India will be benefited due to reduced import duties for cosmetics, aerospace and medical devices, lamb,
salmon, electrical machinery, chocolates and biscuits. But the real picture will be clear gradually.
UK-India’s new free trade agreement (FTA) will allow India to strength its position in the global supply chain
India and UK made landmark FTA
India and UK made landmark Free Trade Agreement (FTA) on 6th May. Both of the Prime Ministers Narendra Modi of India and UK Prime Minister Keir Starmer announced it. On the atmosphere of ongoing high tariff imposition and counter imposition of it among some countries that initiated by the US the formation of
FTAs among countries are thought to be helpful for the world economy.
How does FTAs help?
India has been a laggard country in making FTAs either in regional levels or distant levels. Some well known economists expressed their opinions about it and said that unless India was involved in entering
several FTAs, its economic prosperity would not be according to its potentials. Even some smaller countries like Vietnam have already been benefited hugely by entering into FTAs. At present, to get the
benefit of lowest cost in producing goods every country has to take advantage of supply chain. So, entry into FTAs is a precondition to reaping the benefit of supply chains. By utilizing the supply
chain, an economy can get different inputs of a product from those countries where these inputs are produced at lowest costs. Then the products can be sold through the supply chains at competitive rates
to different countries under FTAs.
The benefits of the FTA between India and UK
The release by the Commerce and Industry Ministry said that the FTA ensures “India will gain from tariff elimination on about 99% of the tariff lines covering almost 100% of the trade value offering
huge opportunities for increase in the bilateral trade”. India has agreed to cut rates of 90% of tariff lines from UK. But it will be done gradually. Likewise 99% Indian exports to benefit from zero duty in
the UK market. The deal is expected to double bilateral trade by 2030. In 2024 the trade between two countries rose to $21.34 billion.
Items of trade to get benefit
Britain can sell whisky, gin, and automotive imports by reduction in tariff. On the other hand, India will be benefited due to reduced import duties for cosmetics, aerospace and medical devices, lamb,
salmon, electrical machinery, chocolates and biscuits. But the real picture will be clear gradually.
