PM Narendra Modi to sign UK-India FTA, which may boost British economy, main features include...

Prime Minister Narendra is most likely to sign the UK-India FTA in London on Thursday. The decks are clear and the officials of the two countries have discussed the nitty-gritty of the deal. Though the Free Trade Deal is supposed to eliminate tariffs on 99% of Indian exports to the UK and reduce tariffs on 90% of British products, there are many grey areas left. It aims to double the bilateral trade from the current $60 billion by 2030, but doubts have been raised. Questions have been raised on many less-discussed provisions of the proposed FTA. 

FTA to benefit UK economy

The UK firms will be exempt to pay for the social security contributions to the Indians living in Britain temporarily for three years. The British companies will be able to save as much as Rs 40 billion. They will also get preference by the Government of India in its purchases. They will be allowed to fill the tenders for the purchase of Rs 2 billion. According to an estimate, the UK corporate world may get access to 40,000 contracts annually with a possible purchase of GBP 38 billion. The UK-India FTA may benefit Britain by increasing its GDP by about  Rs 6.5 billion annually. 

Sectors to benefit from UK-India FTA

According to an Ernst and Young estimate, the tariff on most of British products will be reduced significantly. The EY has said in a report that sectors such as beverages, automotive, medical devices, and advanced manufacturing will have reduced tariffs. Similarly, products like whisky, gin, aerospace components, lamb, salmon, electrical machinery, soft drinks, chocolate, and biscuits will be levied at the minimum, giving a much-needed support to the UK economy. While the tariff on automotive will be slashed from over 100% to as low as 10%,   tariffs on whisky and gin will decrease from a staggering 150% to 75% initially, and then to 40% over the next decade. 

How will FTA increase UK GDP

The EY has projected that the UK-India FTA will help the UK increase its GDP by £3.3 billion by 2035. It may help create significant job creation in India, where labor-intensive sectors like textiles and leather are expected to gain. The FTA covers IT/ITeS, financial, professional (such as architecture, engineering), and educational services. The trade deal is most likely to facilitate easier mobility for professionals, including contractual service suppliers and independent professionals.