Britain and India have struck a significant trade deal, marking a key milestone since Brexit. This agreement comes after three years of intense negotiations, culminating in a flurry of talks in recent days. The deal is seen as a major opportunity for both countries, especially as they approach trade from very different economic backgrounds.
India’s economy has long been known for its protectionist stance, with average tariffs around 130%. In contrast, the UK has a much more open economy, with tariffs hovering around 5%. This difference creates a wealth of opportunities for UK exporters who are eager to tap into India’s rapidly growing market and its increasingly affluent consumers.
The UK government is highlighting the concessions made in the deal. About 90% of tariff lines will see reductions, with 85% of them set to reach zero within the next decade. Notably, tariffs on whisky will be cut in half over ten years, a significant win for British exporters, as no other country has achieved similar concessions from India.
However, this deal isn’t without its compromises. The UK has agreed to lower tariffs on Indian textiles and apparel, which are crucial for India’s economy and employment. Additionally, the agreement will make it easier for Indian professionals to work in the UK, a demand that has been strongly advocated by India. It’s important to note, though, that there will be no formal changes to immigration policy.
Both countries have held firm on certain sensitive industries. The UK will not lower tariffs on milled rice, fearing it could harm local producers. Similarly, India has chosen to protect its dairy industry. They have also agreed on quotas for car imports to address these concerns.
India had sought an exemption for its high-emission industries from the UK’s upcoming carbon tax, but reports suggest that this request will not be granted.
This trade deal represents a significant step in strengthening ties between Britain and India, opening up new avenues for trade and investment while balancing the needs and concerns of both nations.