We finally have an FTA with the UK!
Quick Facts
The trade deal is projected to increase bilateral trade by $34 billion annually and aims to enhance total trade volume to $120 billion by 2030. 99% of Indian exports to the UK will be exempted from any form of tariff.
Sectors that stand to gain are textiles and apparel, agriculture and food products, marine products, engineering goods, and pharma. There is an immigration angle as well and the FTA boosts professional opportunities for Indians
Benefits on the demand side as well
Indian consumers also stand to gain due to access to more choice of products and lowered prices. India has reduced tariffs on whisky and gin, EVs, cosmetics, processed food and a bunch of other items. Average tariffs on UK products reduced fro 15% to 3%.
What India had to concede?
Since the UK is not really a big agriculture or dairy producer, India did not have to disturb those holy cows. The only concessions, as such, seems to be on alcohol and automobiles. They have also opened up government procurement and tenders to British companies in non-sensitive sectors.
What does this mean for other trade deals?
This deal acts as a template for how a good trade deal is done without looming deadlines and threats, as the US is doing. This deal went through multiple rounds of negotiations and discussions before arriving at a mutually satisfactory consensus.
The trade deal with the UK eases the pressure on the Indian side to sign a hastily negotiated deal with the US. Hopefully, this should act as a template for the EU as well, though the old sticking points of dairy and agriculture will come to the fore.
Crucially, a trade deal with UK, Australia and potentially, the EU will signal to the US administration that India is not desperate for a deal, but will instead negotiate on its own terms.