- Hindi news
- Business
- India Uk Free Trade Agreement: Whiskey, Cars & Indian Textiles to get cheaper – full impact analysis
New Delhi45 minutes ago
- Copy link
Earlier on May 6, the deal was finalized between the two countries.
After three years of talks, the Free Trade Agreement (FTA) can be signed next week between India and the United Kingdom (UK). According to media reports, the legal process of the agreement of the agreement has been completed.
Both countries can sign this in the next week. After the agreement is signed, the export tax in UK will be over on labor-entrants like leather, footwear, textile, toys, james and jewelery of India.
At the same time, products like British whiskey, cars will become cheaper in India. After the deal, trade between the two countries is expected to reach $ 120 billion by 2030. Along with this, new employment is expected in areas like digital, engineering, marketing in both countries.
Earlier on May 6, the deal was finalized between the two countries. However, it can take about 1 year to fully implement it. After a signing of the agreement, it will have to take approval from the British Parliament and the cabinet of India.
These goods can be cheaper by the agreement between the two countries-
- Cars: Britain’s luxury cars such as Jaguar Land Rover can now be found at a low price.
- Scotch whiskey and wine: The tariff on alcohol and wine coming from England will be reduced, which will make it cheaper than before.
- Fashion and Clothes: Branded clothes, fashion products and homeware coming from Britain can also be cheap.
- Furniture and Electrical goods: Furniture, electronics and industrial machinery coming from Britain can now be found at a low price.
- Jewelery and Gems: India’s gems and jewelery will be sold cheaply in Britain, which can make products cheap for Indian customers in Britain.
Domestic liquor companies will get competition
Due to this agreement, U.K. The whiskey coming from will be available at a low price in India, which is the largest whiskey market in the world. However, after this deal, domestic liquor companies will get competition, which are moving rapidly in the premium alcohol market.
Mark Kent, CEO of the Scotch Whiskey Association, described the deal as ‘transformational’ and said, “The UK-India Free Trade Agreement is a one-time deal in a generation and a historic moment for Scotch Whiskey Export in the world’s largest whiskey market.”
What will India benefit from free trade deal?
This deal will boost Indian exports and jobs will also be created. India had a merchandise export of a value of $ 12.9 billion in FY 24, or Rs 1.12 lakh crore, to the UK. The deal will help India achieve the 1 trillion export target by 2030. Access to the developed market will also increase.
Prime Minister Narendra Modi described this agreement as historic
Prime Minister Narendra Modi wrote on the social media platform x, ‘It was very happy to talk to his friend Prime Minister Kir Stmper. As a historical achievement, India and Britain have completed the free trade agreement as well as the double contribution convention successfully.
These historical agreement will deepen our strategic partnership. Apart from this, both of them will promote trade, investment, growth, job creation and innovation in economy. I am eager to welcome the Prime Minister’s Stmper to India soon.
Negotiations about the agreement between India-UK started in 2022
The conversation between India and the UK started on 13 January 2022, which has now been completed after about 3.5 years. On February 24, Commerce and Industry Minister Piyush Goyal and UK business and trade secretary Jonathan Rrenalds announced to resume the proposed FTA between the two countries.
Since 2014, India has signed 3 such free trade agreement with Mauritius, UAE, Australia and EFTA (European Free Trade Association). India is actively negotiating on similar agreements with the European Union (EU).
Consent on double contribution convention
Both countries have also agreed to the double contribution convention. When a person or employee goes to work from one country to another, it may usually have to contribute for social security (such as pension, PF, etc.) in both countries. This makes his salary cut twice – one in his country and one in the country where he is working.
The Double Contribution Convention is an agreement that occurs between two countries. Due to this, people and companies working abroad do not have to pay for social security (eg pension, PF, etc.) in two countries at the same time. This benefits both employees and companies and their salary does not cause double cuts.
Double contribution convention works in two ways
Usually, the employee gets the facility to choose in which country it will give money for social security (eg pension, PF, etc.). Or in the country where he is working, he gets exemption from social security contribution.
How many types are trade agreement?
Free trade agreements are given different names according to its nature. These include PTA (preference), RTA (Regional) and BTA (Bilateral). WTO names RTA to all such economic engagements.
With which countries India have signed these agreements?
India have made trade agents with Sri Lanka, Bhutan, Thailand, Singapore, Malaysia, Korea, Japan, Australia, UAE, Mauritius, ASEAN and EFTA blocks.
According to Global Trade Research Initiative (GTRI), India has shifted its FTA focus to Western partners from East (ASEAN, Japan, Korea) after receiving a deal with large economies in Asia.
India is now giving priority to FTA with EU and US to expand exports and strengthen trade relations with large economies of West.
