Dissecting the India-U.K. Trade Agreement: Key Provisions and Strategic Implications
UPSC Relevance
Prelims: Indian Economy (Foreign Trade, Free Trade Agreements - FTAs, Services Sector, Government Procurement), International Relations (India-U.K. relations).
Mains:
GS Paper 2: Bilateral, regional and global groupings and agreements involving India and/or affecting India’s interests.
GS Paper 3: Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Effects of liberalization on the economy.
Key Highlights from the News
India and the United Kingdom (UK) have signed a Comprehensive Economic and Trade Agreement (CETA/FTA).
This agreement is an example of give and take between the two countries.
The UK will grant duty-free access to 99% of Indian products. This will benefit textiles, footwear, automobiles, and marine products from India.
India will provide duty concessions on 90% of UK products, which will reduce the price of items like whisky and British cars. However, key agricultural products like dairy have been excluded from the agreement.
Both countries have agreed to discuss a Double Contribution Convention (DCC). This will allow Indian workers in the UK to pay social security contributions in only one country.
For the first time, India has agreed to auto tariff cuts in a trade agreement. However, this will be subject to a specific quota and implemented in phases.
In another significant move, UK companies will be allowed to participate in Indian central government procurement tenders.
This agreement will serve as a template for future deals that India will pursue with the European Union and the United States.
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