Trade pact with UK, India demands cut in duty on textiles

The talks, scheduled for March 7 to 18, will also explore the possibility of an early-harvesting agreement, or a mini-FTA, for the short term, as the two countries continue talks to iron out differences on sensitive issues. issues.

India is looking to sign at least six bilateral trade agreements this year. Last week, New Delhi signed a Comprehensive Economic Partnership Agreement (CEPA) with the United Arab Emirates for zero duty access to 90% of Indian products. The deal was completed in a record 88 days.

“The UK agreement will be broader than India’s with the UAE. Duty cut on exports from labor-intensive sectors such as textiles and leather, footwear, gems and jewellery, is one of India’s 10-12 big-ticket wish-lists,” said one of the two officials, who sought anonymity.

“There will be a lot of benefit from marine products. India is also looking for access to the UK for pharma and agricultural products. In addition, trade restrictions that are not related to tariffs are also being discussed,” said a second official requesting anonymity. The interim deal covers 65% of goods and 40% of subsidized or duty-free services. % is expected to be involved. Reach. However, the final agreement may cover more than 90% of the products.

Questions from the Ministry of Commerce and Industry and the British High Commission in New Delhi remained unanswered till press time.

India has a positive trade balance with the UK, but is losing its market share in some key products to other developing countries after the withdrawal of the Generalized System of Preferences (GSP). “Therefore, it is in the industry’s interest to achieve zero tariffs in the UK in areas (such as apparel) where GSP has been withdrawn,” said Arpita Mukherjee, Professor at Icrire. Meanwhile, the UK is negotiating access for its services in areas such as legal and accounting, in addition to lower tariffs for its Scotch whisky, which faces a 150% fee.

In January, the two countries reiterated their commitment to more than double the value of UK-India trade by 2030. India had a trade surplus of $3.3 billion with the UK in 2020-21. The UK is India’s seventh largest export market, accounting for 2.8% of its total exports as of June 2021. The Resolution Foundation, a UK think-tank, said in a report that British firms were bound to benefit from a “first mover”. India gains further from the US and the European Union (EU) as a result of the FTA, which has the potential to dominate the UK’s other major trade deals.

The joint statement of the 15th meeting of the India-UK Joint Economic and Trade Committee said that the two countries look forward to the first shipment of apples and medical equipment to India and have welcomed the list of 56 new Indian fisheries establishments.