FTA with Britain

What is the issue?

Recent sector-specific analysis conducted by the Commonwealth provides an initial picture of what could happen, estimating that bilateral trade between Indian and U.K. could rise by up to 26% a year under an FTA.

What did the report say?

• While much of the growth would come from a reduction on tariffs on the Indian side (Indian tariffs are higher on average than the other way round), it estimates that Indian exports to the U.K. could rise by as much as 12%, with sectors such as clothing, industrial and mechanical appliances seeing strong growth.
• The report also highlighted the opportunity for increasing the exports of services as well as new exports such as non-industrial diamonds, and specific mechanical devices.
• While the figures are likely to be on the optimistic side (envisaging a zero-tariff scenario, and the diversion of trade from E.U.), they provide a snapshot of the beneficial impact a FTA could have on stimulating a trade and investment relationship that has faltered in recent years.
• While India has been negotiating a broad-based trade and investment agreement with the EU since 2007, it has remained inconclusive.
• Thus, India was also unable to build and expand on its trade ties with the U.K. as it was part of the EU.
• But with Brexit, Britain offers a fresh start for India to engage on a whole and exciting new level on sectors which have been largely dormant due to EU regulations.

Source: The Hindu