Britain and India have reached a significant milestone by agreeing on a long-stalled free trade agreement after more than three years of negotiations. This historic agreement aims to strengthen economic relations between the two countries. It will do this, in part, by eliminating or reducing import tariffs on over 400 products including whisky, cosmetics, medical equipment and parts for automobiles.
Negotiations for the deal started under a different British government, a testament to a desire to deepen bilateral ties. The agreement brings very positive dividends for both countries’ economies. United Kingdom expects an annual increase in bilateral trade of £25.5 billion ($34 billion) in the long term.
Among the key provisions of the bilateral agreement was a 97 percent reduction in highest Indian import tariffs. Whisky and gin tariffs will immediately be halved from 150% to 75%. By the tenth year of the deal, we would hope they’d be reduced even further to 40%. Moreover, tariffs on automotive parts will decrease from greater than 100% to 10% under a quota-type system.
The deal does a good job at addressing just about every sector. It eliminates all import duties on cosmetics, medical supplies, and airplane parts, really lightening the load on trade between the two countries.
Indian Prime Minister Narendra Modi welcomed the pact as “ambitious and mutually beneficial.” He called attention to its ability to power up innovation-led economic growth, while helping foster greater connectivity and collaboration between India and the UK.
Mark Kent, chief executive of the Scotch Whisky Association, expressed his excitement about the deal. He described it as “transformational” for the whisky industry. He argued that the new tariff structure would significantly increase the competitiveness of British whisky producers. This amendment will allow them greatly increase their market share in India.
