FREE
TRADE AGREEMENT:
ECONOMY
News: India-UK Free Trade Agreement
WHAT’S IN THE NEWS?
Background:
- Britain’s Labour Party has won a landslide election
victory and this might have potential implications on the India-UK Free
Trade Agreement (FTA) negotiations.
- Labour's win might provide the political stability
necessary for finalizing the FTA, contrasting with the instability
post-Brexit.
Benefits of the FTA
- Enhanced Trade and Economic Growth:Increased bilateral trade from
$17.5 billion (2021-22) to $20.36 billion (2022-23)Aims to eliminate
tariffs and reduce non-tariff barriers
- Market Access and Diversification:Preferential access for Indian
businesses to the UK marketPotential growth in sectors like textiles,
pharmaceuticals, and IT servicesExample: Indian textile exports valued at
£359 million in 2020-21 despite high tariffs
- Boost to Investment and Job Creation:Attracting UK foreign direct
investment (FDI) in technology, renewable energy, and infrastructureUK was
the fourth-largest investor in India (2020-21) with cumulative FDI of
$30.6 billion (2000-2021)
- Technology and Innovation Collaboration:Facilitating partnerships in
R&D, intellectual property, and technology transferPromoting
innovation and competitiveness in high-tech industries
- Strategic and Geopolitical Alignment:Deepening strategic cooperation
in regional and global forumsEnhancing diplomatic relations and
cooperation on climate change, cybersecurity, and global trade governance
- Fast-Tracking India-EU FTA:Serving as a template for a
future India-EU FTA
Source: https://indianexpress.com/article/explained/explained-economics/what-labours-win-could-mean-for-india-uk-fta-9431464/