Chennai:The India-UK trade agreement will benefit from the export of textiles and clothing, leather and footwear, gems and jewelry, pharmaceuticals and processed foods, in addition to enhancing its and professional services. India, on the other hand, will lower tariffs on cars, whiskey, gin, medical equipment, aviation and electrical products, and certain foods.
“The trade agreement is a landmark step that will greatly enhance bilateral trade, attract strategic investments, and further integrate Indian companies into global value chains,” said the Federation of Indian Export Organizations.
India- Ukraine FTA eliminates or significantly reduces widespread Indian goods tariffs, giving Indian exporters priority to one of the world's richest and consumption-driven markets.
Textiles and clothing will benefit from the removal of tariffs as it will enhance India's competitiveness with countries such as Bangladesh and Vietnam. “In 2024, the UK imported about $27 billion worth of T&A products from India around the world, making it the fourth largest supplier with a 6.6% stake,” said Citi Secretary General Chandrima Chatterjee.
Leather and footwear will increase opportunities to enter the UK's high-end retail market. Gem and jewelry exporters will enhance handmade products in India, and simplified regulatory processes will accelerate general drug approvals.
The trade agreement will also provide better access to value-added products, including tea, spices, fish, rice and ready-to-eat slices.
“Textiles, footwear, carpets, automobiles and marine products are currently facing tariffs of 4% to 16%” said GTRI founder Ajay Srivastava.
This will also promote IT and professional services through the mobility of professionals and the reduction of barriers to service exports, Fieo President SC Ralhan said. For professionals with short-term missions in the UK, the deal has included a double donation conference. The deal offers three years of exemption for Indian employees working in the UK.
Tariffs for imports of gin and whiskey have been reportedly reduced to 75%. Tariffs for imported cars will be reduced from 100% to 10%, and some foods such as salmon, lamb, soft drinks, chocolate and biscuits, cosmetics, aerospace products, medical equipment, electrical machinery will be reduced by India.
“But the real test of this deal lies in how to deal with the UK's carbon border adjustment mechanism (CBAM). If Indian exports still face CBAM taxes while British goods have no duty tax, it has the potential to turn balanced FTA into a one-sided bargaining,” Srivastava said.
