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FTA Senior Official Is in India confidently anticipates closure, 2023.

Narendra Modi & Rishi Sunak
Narendra Modi Rishi Sunak

Why FTA senior official is India?

FTA senior official from UK PM Rishi Sunak team is in India to expedite deal. UK and India are keen on expediting their FTA agreement. The proposal was laid down this year. Multiple rounds of talks are already taking place in past and currently senior officials of UK PM Rishi Sunak’ team are in India.

In the fiscal year 2022-23, the value of India’s merchandise exports to the UK amounted to USD 11.41 billion. Among these exports, goods totaling USD 6 billion, including petroleum products, medicines, diamonds, machine parts, airplanes, and wooden furniture, entered Britain without incurring any tariffs, according to the report. currently FTA senior official is in India to close the deal and are expected to sort out all hurdles.

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India benefit

FTA senior official is in India to close the deal, from India perspective the elimination of import duties by the UK is expected to particularly favor India’s high-quality, labor-intensive products like apparel, footwear, carpets, and cars. Despite this advantage, the overall positive impact on India is anticipated to be constrained. The Global Trade Research Initiative (GTRI) pointed out that the majority of Indian goods are already entering the UK with low or zero tariffs, limiting the extent of the overall gains.

GTRI emphasized that although the removal of duties in the UK can facilitate Indian exports, achieving significant growth necessitates enhancements in product quality. The report highlighted that merely signing a Free Trade Agreement (FTA) may not independently result in a substantial increase in India’s exports of labor-intensive goods.

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UK benefit

FTA senior official is in India to close the deal, from UK perspective as per GTRI, the Free Trade Agreement (FTA)-driven tariff reductions will benefit various British products. These include precious metals such as silver, unwrought platinum, gold, and diamonds; metal scrap like aluminum and copper waste; petroleum products; alcoholic beverages like Scotch and others; machinery including turbojet, taps, and valves; medicinal products; and cosmetics. In the fiscal year 2022-23, the UK exported significant amounts, totaling USD 2.7 billion in precious metals and USD 374 million in Scotch and other alcoholic beverages to India.

Obstacles from UK

UK negotiators are steadfast in their demand for heightened protection of the country’s geographical indication (GI) products originating from the agriculture sector. Negotiations are particularly focused on prominent British GI items like Scotch whisky, Stilton cheese, and Cheddar cheese, as both parties strive to reconcile their differences in this regard.

Obstacles from India

According to a report in the Economic Times on November 8, India has not yet finalized its stance on import duties for electric vehicles (EVs). Unnamed sources mentioned in the article indicated that New Delhi is contemplating a 30 percent concessional tariff on 2,500 EVs imported from the UK, given that their price exceeds US$80,000. It’s worth noting that India currently imposes a duty of 70-100 percent on imported cars sold as completely built units, depending on their price.

Given the price sensitivity of the Indian market, the best-selling EV is the Nexon. EV from Tata Motors, priced at US$18,000 (INR 1.5 million). Additionally, the government is actively promoting the development of domestic manufacturing capabilities in the burgeoning electric vehicle sector.

FTA senior official to find middle ground to close deal.

FTA senior official is in India and are potentially on track to find common ground regarding an investment pact. The negotiations between the two nations are likely aimed at reaching a compromise or agreement on matters related to investment. The specifics of the potential middle ground or agreement were not provided in the statement, but it suggests ongoing discussions and efforts to bridge differences between India and the UK in the realm of investment. UK and India came long way to close this deal.

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