Cars, chocolate, biscuits to become cheaper: Here’s how India-UK trade deal will help common man | Business

The comprehensive economic and trade agreement (CETA), which will boost mutual commerce between India and the United Kingdom to $100 billion by 2030, will come into force on Wednesdsay. At present, India and the UK’s trade volume stands at $55-60 billion and the target is that in the next 3-4 years, India will be able to reach USD 100 billion. According to the deal, from July 15, India’s textiles, leather and footwear, gems and jewellery and plastics exports will enter the British market with zero duty.

Here’s what PM Modi said on UK-India trade deal

Earlier, PM Modi said the agreement will significantly boost bilateral trade and investment and will also unlock numerous opportunities for Indian farmers, workers, MSMEs, startups and innovators and contribute meaningfully to the realisation of Viksit Bharat 2047. The trade deal was firmed up during PM Modi’s visit to London in July last year. PM Modi said the trade pact will bring significant momentum to the economic ties between India and the UK.

The trade deal will bring a range of benefits to industries across the UK and India, with whisky tariffs dropping from 150 per cent to 40 per cent, automotives from 100 per cent to 10 per cent under a quota and cosmetics will see tariffs of up to 22 per cent eliminated either from day one or after staging, a British readout said.

UK will cut tariffs on Indian goods coming into the country

The UK will cut tariffs on Indian goods coming into the country such as clothes, footwear, and some food products. Less cost for British businesses importing Indian products could mean lower prices and more choice for consumers across the country, the readout said.

The historic Comprehensive Economic and Trade Agreement (CETA) between India and the United Kingdom (UK) will directly benefit everyone, from ordinary people to businesses. Many products imported from Britain will now be cheaper than before. It will also become easier for Indian companies to do business in the UK market.

Import duties on chocolate, biscuits, cosmetics to become cheaper

Once the new trade deal comes into effect, import duties on Scotch whisky, gin, chocolate, biscuits, cosmetics, and some British cars will be gradually reduced.

This will impact the prices of these products over time, and consumers may end up paying lower prices than before. There will be a big cut in tax on scotch and cars. Currently, Scotch whisky in India attracts an import duty of up to 150%.

As part of the new agreement, this will initially be reduced to 75% and then to 40% over the next 10 years. Similarly, the import duty on British cars, which was up to 110%, will be gradually reduced to 10%. Electric and hybrid cars will also benefit from this arrangement.

India will export 99% of its products to UK without import taxes

The biggest beneficiaries of this agreement will be Indian exporters. India will now be able to export approximately 99% of its products to the UK without any import taxes. This will increase the competitiveness of Indian companies and is expected to boost exports. Sectors such as textiles, ready-made garments, leather, footwear, seafood, sports goods, toys, gems and jewellery, engineering goods, auto parts, and organic chemicals are expected to benefit the most.

Trade deal to protect Indian farmers and dairy industry

The government has excluded several agricultural products, such as dairy products, sugar, rice, apples, cheese, chicken, pork, and eggs, from the agreement, which aims to protect Indian farmers and the dairy industry from competition from cheaper foreign products.

Trade deal will elevate economic relationship

This agreement will elevate the economic relationship between the two countries. It is estimated that total trade between India and the UK could increase by approximately 39% by 2040. This will generate billions of pounds of additional trade between the two countries each year, and will also boost India’s exports, investment, and employment opportunities.

What gets cheaper and which Indian sectors to benefit?

• Marine products and seafood
• Textile and garment manufacturers
• Leather goods and footwear
• Auto components
• Electrical equipment
• Chemicals
• Gems and jewellery

What will become cheaper after India-UK trade deal?

• Premium British cars
• Electric vehicles from the UK
• Whisky
• Chocolate
• Biscuits and confectionery
• Machinery and industrial equipment
• Medical devices
• Auto parts

Also Read: 

India-US trade deal: Key takeaways from interim agreement | Full statement