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India Today
10 hours ago
- India Today
India-UK FTA: Big trade, some trade-offs, and a whole new order
Even as US president Donald Trump announced fresh 'reciprocal tariffs' on Indian goods and a long-pending trade deal with Washington remains elusive, India has pulled off a landmark agreement with another G7 heavyweight, the July 24, New Delhi and London signed the Comprehensive Economic and Trade Agreement (CETA), India's first such pact with a G7 nation. Touted as 'historic', the agreement aims to double bilateral trade by 2030. It offers unprecedented market access—from duty-free exports of Indian textiles, leather and gems to sharply-reduced tariffs on iconic British products such as Scotch whisky and luxury the deal is ratified by both houses of the British Parliament, India will get to export its textiles, leather, vegetable oils and gems and jewellery, among other goods, duty-free to the UK. Nearly all agricultural and processed food exports from India, with limited exemptions, will become turn, discerning Indian consumers can look forward to iconic British products—from Scotch whiskies such as Johnnie Walker and single malts such as Lagavulin and Glenlivet to luxury cars such as Jaguar, Land Rover, Bentley and Rolls-Royce—turning a lot cheaper. Duties on Scotch whisky and gin—currently at 150 per cent—will fall to 75 per cent immediately and then to 30-40 per cent over a decade. India-UK bilateral trade was valued at $56 billion (Rs 4.9 lakh crore) in FY25, of which merchandise trade comprised $23 billion (Rs 2 lakh crore), while services formed the lion's share, at $33 billion (Rs 2.9 lakh crore). Of the total merchandise trade, India's exports to the UK were to the tune of $14.5 billion (Rs 1.2 lakh crore), with electrical and electronic items, engineering goods and petroleum products topping the from the UK stood at around $8.5 billion (Rs 73,778 crore), and comprised machinery, chemicals and precious metals, among others. In services, too, India enjoys a trade surplus with the UK. While services imports from the UK were $13.2 billion (Rs 1.1 lakh crore), services exports were valued at $19.8 billion (Rs 1.7 lakh crore).At the heart of it, CETA is a manifestation of both nations' evolving imperatives. India, for instance, has moved from a defensive to a strategic trade posture, seeking to integrate with global value chains on its own terms. The UK, on the other hand, needed a major bilateral win outside Europe following the post-Brexit economic recalibration. India, with its fast-growing economy and vast market, was a perfect are of the view that India extracted meaningful gains, safeguarded its vulnerable sectors and framed the deal as a new template for future engagements with the European Union (EU), European Free Trade Association (EFTA) and even the US. 'Our effort is that the Indian industry gets preferential access over our competition, and I think this (CETA) can become a gold standard to ensure that India protects its sensitive sectors and opens the doors, particularly in highly labour-intensive sectors, and allows high-quality goods, technology and other products to come to India,' said Piyush Goyal, Union commerce and industry export edgeThe UK has done away with 99 per cent of tariff lines for Indian goods, accounting for roughly 95 per cent of India's exports by value, paving the way for zero-duty access, while India has removed or reduced tariffs on 90 per cent of its lines, covering 92 per cent of its imports from the Indian exporters in sectors such as textiles, garments, marine products, gems and jewellery, pharmaceuticals and light engineering goods, who have often found themselves edged out by preferential trade access enjoyed by competitors such as Vietnam, Bangladesh or sub-Saharan African countries, this is a long-awaited breakthrough. For sectors such as apparel, carpets and marine produce, the removal of customs duties will translate into immediate competitiveness and a sharp boost in margins, especially for micro, small and medium enterprises (MSMEs).Services, the major component in bilateral trade, get a generous slice too. For Indian professionals in IT, architecture, legal services, financial consulting and education, the pact promises smoother visa pathways, clearer eligibility criteria and, crucially, recognition of qualifications in key fields such as accountancy and engineering. The provisions are hedged, with reviews built in, but they reflect a quiet shift: India is no longer just bargaining for goods. It wants its human capital to move, work and earn globally on fairer the Indian side, we are looking at exports of apparels and textiles in a big way, since we will now have a level-playing field with countries like Bangladesh, Pakistan, Cambodia, which are getting zero-duty benefit in the UK, and with Vietnam, which has an FTA (free trade agreement) with it,' says Ajay Sahai, director general and CEO of the Federation of Indian Export Organisations.'So, we will be much better off than Pakistan and China or Indonesia, who are our competitors in those markets. Those countries will have to pay duties as high as 12 per cent. The same will be the case with footwear and even in sectors such as leather,' adds makes the pact striking is that it avoided as much as what it secured. On pharmaceuticals, India held firm. While copyright terms have been extended to 'life plus 60 years' in line with UK standards, the deal protects India's ability to manufacture generics and avoids any clause that could threaten its public health safeguards. There is also no Investor-State Dispute Settlement (ISDS) mechanism—a controversial provision in earlier free trade agreements that India now flatly rejects. In the age of regulatory litigation and billion-dollar arbitration awards, this is not just a legal footnote—it is a line drawn in the trade-offsOn its part, the UK secured the elimination of tariffs on 64 per cent of its exports to India immediately, with that number rising to 85 per cent over a decade. While many of these exports are non-sensitive goods, such as machinery, chemicals and processed foods, there are three particularly contentious areas: automobiles, alcoholic beverages and public fall in duties on whisky alone was a red line issue for both the Scotch Whisky Association and Indian state governments. Alcohol excise duties form a major chunk of state revenues, especially in Maharashtra, Karnataka and Punjab. With cheaper Scotch entering the market, there is palpable concern of tax erosion and growing import dependency, not to mention the long-term pressure on local liquor brands. The central government has promised a compensatory formula and phased transition, but state finance ministers are far from automobile sector presents a similar paradox. While duties on UK cars, including electric vehicles, will be cut over time, imports are capped through tariff-rate quotas (TRQs), ensuring that the volume remains contained. But even these limited concessions have rattled domestic players. Indian manufacturers of luxury and electric vehicle (EV) models, such as Tata Motors, Mahindra and Maruti's premium segment, worry that British imports could disrupt the top-end of the market. Their fears are not about today but about a future where British cars begin entering at scale under preferential there is public procurement—a largely overlooked but critical dimension. For the first time in any of its FTAs, India has agreed to open its federal-level procurement tenders to a foreign partner. UK firms will now have access to Rs 3.3 lakh crore worth of Indian government contracts, particularly in infrastructure, renewables and public health. The 20 per cent local content clause is meant to protect Indian suppliers. However, MSMEs are worried. Many see this as a beachhead for large British firms to underbid local competitors in areas traditionally used for nurturing domestic industrial it workCETA provides a great opportunity for Indian companies to export into one of the world's most developed markets with greater gusto, since they now have an edge over competing countries, but that's easier said than done. There are several issues that India will have to set right. The fact that manufacturing has lagged in general, and stagnated at around 15-17 per cent of the GDP, does not help.'We need to improve manufacturing in a big way to be competitive,' says Sahai. 'Reduced tariffs alone are not going to help turn competitive. We need to reduce our logistics and shipping costs, and vastly improve our shipping time.'While CETA has provided India with an enabling environment, turning this opportunity into a thriving trade would require a clear policy direction for bettering our manufacturing and making transport infrastructure much more efficient to help our companies move up the global value chain.—With M.G. ArunSubscribe to India Today Magazine- EndsTune InMust Watch
New Indian Express
5 days ago
- New Indian Express
Let 2026 election be fought on people's wealth
The promised downward revision of prices of Jaguar and Johnnie Walker is barely a hot topic of discussion as the absence of tomato in rasam and of coconut in chutneys these days. For the EMI-trapped generation, the fall in interest rate still tops the list. On the other side, people from the bottom of the pyramid, which shrinks only when the cutoff is raised for political convenience, are more bothered about their daily bread. Your personal income may be rising slowly in pure numbers but persistently shrinking in value and in what it can afford to buy for you. What is heartening now is that some governments have begun to talk about putting more money in the hands of people; the promise of repatriating black money from Swiss banks and sharing the booty with common people has outlived its utility and died. Some promises are meant to perish as empty promises. So be it. When a government makes a serious effort at bringing in investments, taps the inherent potential for revenue growth, and spreads the message of social welfare to help people escape the poverty trap, it is the first baby step towards heralding economic progress. Tamil Nadu has taken the lead to announce to the world that the per capita income (at constant prices) has jumped to nearly Rs 2 lakh, making it the second-highest in India, just behind Karnataka's Rs 2.05 lakh. A balanced economic model, robust infrastructure, and skilled workforce have been the key drivers. TN's economic growth at 9.69% in 2024-25, the highest in India, has surely given it a push. If BJP wants to take pride in the rise in national per capita income (at constant prices) to Rs 1.15 lakh in 2024-25, up from Rs 72,805 in 2014-15, it ought to thank the southern states. Karnataka, TN, and Telangana have topped the chart, helping the national average to record an impressive 58% growth in the last 11 years, while the growth in BJP-ruled states is nothing to write home about.
Time of India
24-07-2025
- Time of India
IAF's 3-day border exercise underway in Rajasthan
Jaisalmer: Indian Air Force (IAF) is conducting a major air exercise in border districts of Rajasthan, testing its operational readiness and strategic capabilities. The three-day exercise, which began on Wednesday and will continue until Friday, is taking place in Jaisalmer, Barmer, and Jodhpur areas close to the Pakistan border. A Notice to Airmen (NOTAM) has been issued, restricting civilian flights in the airspace between Jaisalmer and Jodhpur to allow uninterrupted military operations. During the exercise, fighter jets such as Rafale, Sukhoi-30, Mirage 2000, and Jaguar are conducting both day and night sorties. The drills focus on engaging aerial targets and executing precise ground attacks. The sounds of fighter jets have been resonating over the border areas, especially during nighttime maneuvers. Sources said the exercise involves coordinated operations from key airbases in Jodhpur and Uttarlai in Barmer, with sorties being flown over the Pokhran Field Firing Range in Jaisalmer. The NOTAM ensures that the Air Force can operate drones, missiles, and other combat aircraft without interference from civilian air traffic, reducing the risk of accidents and allowing for more realistic training scenarios. Although described as a routine and pre-planned exercise, the timing and location are seen as highly significant. Experts suggest that the drills send a clear message to Pakistan, especially in the context of recent attempts at drone incursions, espionage, and infiltration along the border. The exercise underlines India's readiness to respond promptly to any hostile activity.
