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Kolkata: From export of electronic items and software and IT-enabled services to export of chemicals and reduced prices of automobiles and liquor from England, the India-UK Free Trade Agreement has been like a breath of fresh air, industry associations have said. It will also push the "Make in India for the World" initiative since the agreement has paved the way for zero-duty access for Indian electronic products such as smartphones, inverters and optic fibre cables for the UK market. Telecom gear manufacturers were also ecstatic about the deal which, they said, will help them attain growth in the developed economies.
Apart from the formal sector, small traders, farmers and manufacturers can also stand to gain from the FTA, remarked the Confederation of All India Traders. Textiles, gems and jewellery and handicrafts manufacturers and exporters could also benefit from the deal.
The agreement hopes to double India-UK bilateral trade from $60 billion to $120 billion by 2030 and one of the biggest beneficiaries of this surge could be the Indian electronics manufacturers. While India will enjoy bigger opportunities to export products such as electronics, telecom items, chemicals, textiles, IT services, footwear, gems and jewellery, sports goods and toys, Indian consumers will have easier access to British goods such as chocolates, biscuits, cosmetics, automobiles and liquor.
Ashok Hinduja, Chairman, Hinduja Group of Companies (India) described the agreement as "a new era of strategic economic partnership—opening up unprecedented opportunities for growth, innovation, and investment" which will help in job creation and deep technology ties. Sudarshan Venu, MD, TVS Motor Company described it as a pivotal moment as "it opens new frontiers for Indian companies to take ‘Make in India’ to the world".
"The UK-India Vision 2035 aligns closely with our own strategic priorities building resilient supply chains, investing in frontier technologies, and fostering a just transition to a low-carbon economy," said Anish Shah, group CEO and MD, Mahindra Group. The potential of the FTA to generate employment was also mentioned by industry captains.
In another significant development, the agreement spoke of open access to the internet for the citizens of the two countries and measures to protect consumers in the digital space. The two countries will also take collaborative action against cyber crime and spammers.
"This could make imports cheaper into India and may make life a little more difficult for the domestic manufacturers. However, there has been a very positive move in the sense that smartphones, inverters and coaxial cables as well as conductors have been brought down to zero duty by the UK government. That opens a very big market for Indian manufacturers and this also includes consumer electronics," Rajoo Goel, secretary genera of ELCINA, electronics component association told the media.
Chemicals that Indian manufacturers export will also get a fillip following the FTA. A commerce ministry official said the FTA can trigger a 30-40% rise in India's chemical exports to the UK from its current value of $570.32 million, which is about 2% of India's global chemical exports. The duties on chemical products will be nil from the earlier 8%, reports said. India exports chemicals and similar products worth $40.52 billion globally.
Bulk drug imports, contract research and manufacturing will all be positively impacted by the FTA. The chairman of Pharmaceuticals Export Promotion Council of India Namit Joshi said the India-UK Free Trade Agreement will be a "pivotal milestone" especially in the pharmaceutical sector. In FY24, India's pharmaceutical exports to the UK touched $914 million. Joshi remarked it will bolster supply chains, improve access to affordable medicines and boost FDI in this crucial sector.
British-made cars will also get cheaper in India. New Delhi will slash import duty on British passenger cars to 10% in five years subject to quota. But in order to protect the emerging domestic sector, no concessions have been given to electric, hybrid, and hydrogen vehicles in the first five years. Incidentally, this is the first time that Indian is opening its auto sector in an FTA.
On another plane, connoisseurs of UK-made spirits including Scotch whisky can look forward to a cheaper peg as India will be slashing duty on UK whisky and gin from 150% to 75% and then to 40% in the course of the next 10 years. "Whisky producers will benefit from tariffs slashed in half, reduced immediately from 150% to 75% and then dropped even further to 40% over the next ten years - giving the UK an advantage over international competitors in reaching the Indian market," said a statement of the UK government. Indian alchobev brands such as Radico Khaitan said Indian manufacturers can now explore the UK market.
