UK-India Trade Agreement Sealed: Industry Bodies and Companies Respond Favorably
India-UK Free Trade Agreement: A Game-Changer for Indian Exports
The historic Comprehensive Economic and Trade Agreement (CETA) between India and the UK, signed after 14 rounds of talks and three years of deliberations, is set to bring significant benefits to various sectors in India.
The agreement is particularly advantageous for India's MSME sectors, agriculture, and key industries like textiles, marine products, and processed foods.
For the MSME sector, hubs such as Agra, Kanpur, Kolhapur, and Chennai will benefit from tariff-free exports and simplified standards, enhancing their competitiveness in the UK market. The agreement is described as "game-changing" for entrepreneurs and MSMEs, opening immense opportunities across various sectors.
In agriculture, over 95% of tariff lines are duty-free, which is expected to boost Indian agricultural exports by over 20% within three years. Duty-free access covers a wide range of products like fruits, vegetables, cereals, pulses, spices, mango pulp, pickles, jackfruit, millets, and organic herbs, supporting India's goal of reaching $100 billion in agri-exports by 2030. Sensitive agricultural sectors such as dairy, apples, oats, and edible oils remain protected under the FTA.
Specific industries and other sectors are also expected to see a boost. Marine products will benefit from the removal of tariffs on shrimp, tuna, fishmeal, and feeds, creating a $5.4 billion export opportunity for India. The FTA provides duty-free access for 1,143 product categories in the textiles and apparel sector, including ready-made garments, carpets, handicrafts, and home textiles. This removes the previous tariff disadvantage India faced versus countries like Bangladesh and Cambodia and could help India gain an estimated 5% more market share in the UK.
The agreement also benefits the processed food sector, with tariffs on processed foods dropping from up to 70% to zero, benefiting labor-intensive sectors. Oilseed exporters will benefit from reduced tariffs and streamlined export procedures, potentially raising exports to the UK.
Overall, the FTA is projected to increase exports, reduce costs for Indian producers, and enhance market access across key sectors, supporting India's broader economic and export growth goals, particularly targeting $100 billion in agricultural exports by 2030 and strengthening the MSME ecosystem.
The TVS Motor Company, which acquired the British motorcycle brand Norton Motorcycles in 2020, is excited about the launch of Norton vehicles in Britain due to the FTA. The agreement has been hailed as a defining moment in the bilateral relationship by Chandrajit Banerjee, Director General of the Confederation of Indian Industry.
The success of the agreement, according to Amit Baid, will depend on how effectively both sides convert market access into meaningful outcomes for jobs, supply chains, and investors. The agreement promises to catalyse bilateral trade and enhance the competitiveness of Indian SMEs, as stated by Hemant Jain, President of PHD Chamber of Commerce and Industry.
Indian industry welcomes the FTA with great optimism, with Sunil Bharti Mittal, Founder and Chairman of Airtel's parent firm, Bharti Enterprises, and Co-Chair of the India-UK CEO Forum, leading the way. The agreement is expected to unlock economic potential, create jobs, and accelerate progress in sectors like green mobility, clean energy, digital technologies, and advanced manufacturing, as seen by Mahindra Group.
In conclusion, the India-UK Free Trade Agreement is a significant step forward in the relations between India and the UK, offering numerous opportunities for various sectors in India and boosting the country's economic growth.
- The Comprehensive Economic and Trade Agreement (CETA) between India and the UK could catalyze bilateral trade, particularly in the technology sector, as the agreement promises to accelerate progress in advanced manufacturing and digital technologies.
- The FTA provides duty-free access for over 1,143 product categories in the textile and apparel sector, which could spur innovation in the industry by encouraging the use of finance and business strategies to meet growing demand in the UK market.
- In the finance sector, the agreement is expected to open immense opportunities across various sectors, as reduced costs for Indian producers due to tariff reductions could boost investments and create more jobs.
