India has signed its most ambitious trade agreement yet – with Australia. But how does this deal compare with UK’s ambitions for a trade deal and how will it benefit businesses?
The UK and India have now finished the third round of negotiations of the India-UK Free Trade Agreement (FTA), after 60 separate sessions covering 23 policy areas – set to include key benefits in areas such as investment, climate, health and defence.
With an estimated £23 billion of trade between the UK and India, the business community is undoubtably eager to unlock the potential benefits of a comprehensive FTA – so, what will it look like when the ink is dry? To better predict where we may see ambitious progress, we have identified two key areas addressed by the Economic Cooperation and Trade Agreement (ECTA): India and Australia’s newest FTA.
Reduction of trade barriers
Currently, only 3% of products exported to India from the UK are tariff-free. A removal of tariffs on British imports would increase market access and price competitiveness for British products, strengthening industries across the UK, and supporting domestic job creation.
With increased transparency and lowered market access costs, SMEs stand to benefit in particular from a negotiated FTA with India, contributing to a UK-wide levelling up.
Under the ECTA, 85% of Australian exports to India will be tariff free – over the next 10 years, tariffs will be further reduced on a range of Australian exports, like fruits and vegetables, pharmaceutical products and medical devices, wine, and wood products. The ECTA also acknowledges the barriers that aren’t tariff-related but still disrupt smooth trading– and both countries have agreed to work on these going forward.
Professional Services
Investor confidence was raised as an area of concern in the UK Government’s initial FTA consultation, although, as no solutions were mentioned, a future FTA would need to be clear on protections.
As the world’s second largest services exporter, UK firms stands to benefit from reduced regulatory friction and increased collaboration across both markets.
The ECTA provisions pro
Exclusive My CBI member-only content
