India-Britain Relation / What will be the effect of free trade agreement between India and Britain, which goods will become cheaper? Know here

India-Britain Relation: After the formation of the new Labor Party government in Britain, the way for a free trade agreement between India and Britain has been cleared. In the first month of the formation of the government, British Foreign Minister David Lammy said on his visit to India that his government wants to enter into a free trade agreement (FTA) with India as soon as possible. The British Foreign Minister has said that 'Labor Party is ready for this agreement.' In such a situation, it is expected that both the countries will complete this deal by the end of this year i.e. before 31 December 2024. What will change between the two countries after this agreement? What relief will the businessmen of both the countries get? Which things will the common people get cheaper. Let us know the A to Z things of this free trade agreement.

FTA talks will start again soon

The newly elected government of the Labor Party in Britain has said that the negotiating teams will soon sit at the negotiating table again to enter into a free trade agreement (FTA) with India. UK Commerce Minister Jonathan Reynolds clarified his ministry's approach to international trade deals. He said that economic growth will be at the center of negotiations to implement high-quality agreements. He said that these agreements will help the UK business sector to access international markets and boost jobs. The UK Commerce Ministry said that it also plans to publish a trade strategy which will be linked with the government's industrial strategy.

What did Foreign Minister David Lammy say?

UK Foreign Minister David Lammy said, India is an emerging superpower of the 21st century. With a population of 1.4 billion, it is the largest country in the world and has one of the fastest growing economies in the world. "He said, our free trade agreement negotiations are not the ceiling but the base of our ambitions, which relates to our desire to expand our shared potential and grow from Bengaluru to Birmingham. A statement issued by the UK government said that Lammy will focus on renewing the UK-India partnership, in which he will negotiate a free trade agreement, which will benefit the economies of both countries. The statement said that entering into a free trade agreement with India is one of Britain's commitments.

Why is Britain considering this deal important?

The UK economy is facing a severe recession. The new government will try to get out of it. According to Reynolds, promoting foreign trade is necessary for a strong economy at the domestic level and hence there will be no delay in taking forward trade talks with its international partners. He further said, from the Gulf to India, our trade program is ambitious and uses Britain's strength to give its businesses access to some of the world's most exciting economies. Reynolds said that his negotiating team would start talks as soon as possible.

13 rounds of talks have been held

India and Britain started talks on FTA in January 2022. 13 rounds of talks have been held between the two countries. The 14th round of talks was halted due to the elections. Now it is expected to start soon.

What are the benefits of having an FTA between India-UK?

Tariff reduction: India is seeking lower tariffs for fashion, homeware, furniture, electrical and general industrial machinery.

Import duty exemption: SMEs in textiles, apparel and gems and jewellery have previously benefited from the complete removal of import duties due to India's trade agreements with the UAE and Australia.

Relief from double taxation: India and the UK will get relief from double taxation. This will benefit the businessmen of both the countries.

Raising funds will be easier: Under the FTA, the UK will also provide Indian businessmen access to funding and expertise. Indian businesses will also be able to raise funds from the London market through listing and issuing bonds.

Many things will become cheaper: With the FTA, India will cut tariffs on cars, scotch whisky and wine. This will make these things cheaper here.

Bilateral trade will be boosted: The early completion of the FTA is expected to boost bilateral trade. Bilateral trade between India and the UK is set to increase from $17.5 billion in 2021-22 to $20.36 billion in 2022-23. FTA will boost bilateral trade between the two countries.

What will India benefit from?

Indian exports will get a boost. India's labour-intensive sectors such as apparel and gems and jewellery have seen a sharp decline in market share in the last five years. Indian textile exports are facing tariffs of up to 10% in the UK. Having an FTA can bring India at par with competitors like Bangladesh, and textile exports can increase.

What is FTA?

Free Trade Agreement (FTA) is a business agreement under which bilateral trade is promoted. For this, changes or reduction in tax structure is brought. It can be between two or more countries and groups. India first signed this agreement with the countries of East Asia.