London [UK], July 24 (ANI): Farmers in India are among the major winners as they are set to get preferential access to UK’s agricultural market — pegged to be around USD 37.5 billion — with the signing of the landmark India-UK Free Trade (FTA) Agreement.
Post the formalisation of the FTA, it is expected to open premium markets in the UK for Indian produce, offering similar or even better benefits than those enjoyed by exporters from European countries like Germany and the Netherlands.
Indian staples such as turmeric, pepper, and cardamom, along with processed products like mango pulp, pickles, and pulses, will get duty-free access, improving their margins and market reach. Over 95 per cent of India’s agricultural and processed food tariff lines will face zero duties once the agreement is enforced.
These include fruits, vegetables, cereals, spice mixes, fruit pulps, ready-to-eat meals, and more. This move will reduce the landed cost of these goods in the UK and enhance their competitiveness.
The FTA will help Indian agriculture sector transition from focus on high volume to high value products, and from catering to local markets to expanding globally.
India has also ensured that the FTA fully protects sensitive sectors like dairy, vegetables, apples, cooking oils, oats. There will be no tariff concessions on these commodities.
Further, in what could be termed as a “big catch” for Indian fish farmers, the USD 5.4 billion UK market also got opened up for marine exports as UK import duty on marine products are set to fall to zero from up to 20 per cent.
Coastal states like Andhra Pradesh, Odisha, Kerala, and Tamil Nadu are poised to hugely benefit duty rationalisation on marine products.
The India-UK FTA also has provisions for zero duty on major sectors. Amongst those, textiles and clothing have been reduced from up to 12 per cent, 8 per cent on chemicals, and 10 per cent on base metals.
India’s principal advantage under the agreement lies in duty-free access for its labour-intensive sectors, processed food items, and other high-tariff product segments where India holds a strong competitive edge.
Indian businesses will also have a zero duty access to the UK for goods such as electrical machinery; gems and jewellery; leather/footwear; minerals; transport/auto; aluminium; iron and steel; copper; and hosts of items.
The FTA also has elements that will provide passive gain for rural India and exporters. Duty on processed foods has been reduced to zero from up to 70 per cent earlier.
For cross-border mobility between the two countries, Double Contribution Convention (DCC) to exempt workers, employers from social security contribution for three years. As many as 75,000 Indian workers in UK will gain from three-year exemption from social security contribution.
These will be particularly beneficial for professionals, who will get better mobility access to the UK.
The much-awaited landmark India-UK Free Trade Agreement was signed on Thursday, in the presence of Prime Ministers Narendra Modi and his British counterpart Keir Starmer, as PM Modi is on a two-day visit to the UK.
On May 6, Prime Minister Modi and PM Starmer had announced the successful conclusion of a mutually beneficial India-UK Free Trade Agreement (FTA). This forward-looking Agreement is aligned with India’s vision of Viksit Bharat 2047 and complements the growth aspirations of both countries.
Both nations desire to increase their trade to USD 120 billion by 2030.
On Thursday, the UK government said that India’s average tariff on UK products will drop from 15 per cent to 3 per cent under India-UK FTA. The UK statement asserted that British companies selling products to India — from soft drinks and cosmetics to cars and medical devices — will find it easier to sell to the Indian market.
Further, British whisky producers will benefit from tariffs slashed in half, reduced immediately from 150 per cent to 75 per cent and then dropped even further to 40 per cent over the next ten years – giving the UK an advantage over international competitors in reaching the Indian market, the UK statement noted. (ANI)
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