What will be the effect of the India-UK Free Trade Agreement, which goods will become cheaper? Know here

Relations between India and Britain: After the formation of the new Labour Party government in Britain, the way has been paved for a Free Trade Agreement (FTA) between India and Britain. In the first month of the government formation, British Foreign Secretary David Lammy during his visit to India said that his government wants to conclude a Free Trade Agreement (FTA) with India as soon as possible. The British Foreign Secretary has said that ‘Labour Party is ready for this agreement.’ In such a situation, it is expected that both the countries will finalize this deal by the end of this year i.e. before December 31, 2024. What will change between the two countries after this agreement? What relief will the businessmen of both the countries get? What things will be cheaper for the common people. Let us know the A to Z things of this FTA.FTA negotiations to resume soonBritain’s newly elected Labour Party government has said that negotiating teams will soon return to the negotiating table to negotiate a free trade agreement (FTA) with India. British Trade Minister Jonathan Reynolds has clarified his department’s approach to international trade agreements. He said that economic growth will be central to the negotiations to implement high-quality agreements. He said that these agreements will help the British business sector access international markets and boost jobs. The British Trade Department said it also plans to publish a trade strategy that will be linked to the government’s industrial strategy.What did Foreign Minister David Lammy say?British Foreign Secretary David Lammy said India was a rising superpower of the 21st century. With a population of 1.4 billion, it is the world’s largest country and has one of the fastest growing economies in the world. “He said our negotiations for a free trade agreement are not the ceiling but the foundation of our ambitions, which are linked to our desire to expand our shared potential and grow from Bengaluru to Birmingham. A statement from the British government said Lammy will focus on renewing the UK-India partnership, negotiating a free trade agreement that 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 does Britain think this deal is important?The British economy is in a deep recession. The new government will try to get out of it. According to Reynolds, promoting foreign trade is necessary for a strong economy at home and therefore there will be no delay in continuing trade negotiations with its international partners. He went on to say that our trade programme from the Gulf to India 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 discussions were heldIndia and Britain began talks on a free trade agreement in January 2022. There have been 13 rounds of talks 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 an India-UK Free Trade Agreement?Tariff reduction: India is aiming to reduce tariffs on fashion, household goods, furniture, electrical and general industrial machinery. Import duty exemption: SMEs in textiles, apparel, and gems and jewellery have earlier benefited from complete removal of import duties under India’s trade agreements with the UAE and Australia. Double taxation relief: India and the UK will get double taxation relief. This will benefit businessmen of both the countries. Fundraising will be easier: Under the FTA, the UK will also provide access to finance and expertise to Indian businessmen. Indian companies will also be able to raise funds in the London market through listing and issuance of bonds. Many things will become cheaper: With the FTA, India will reduce 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 expected to increase from $17.5 billion in 2021-22 to $20.36 billion in 2022-23. The FTA will boost bilateral trade between the two countries.What does India benefit from?India’s exports get a boost. India’s labour-intensive sectors such as garments and gems and jewellery have seen a sharp decline in market share over the past five years. Indian textile exports are facing tariffs of up to 10% in the UK. An FTA could bring India on par with rivals such as Bangladesh, and increase textile exports.What is FTA?Free Trade Agreement (FTA) is a business agreement under which bilateral trade is promoted. For this purpose, changes or reductions are made in the tax structure. It can be between two or more countries and groups. India was the first to sign this agreement with the countries of East Asia.