Latest news with #ComprehensiveEconomicandTradeAgreement
New Indian Express
4 days ago
- Business
- New Indian Express
Delhi Speaker Vijender Gupta meets delegation from British Parliament
NEW DELHI: A delegation of British Parliament led by House of Commons Deputy Speaker Nusrat Ghani visited the Delhi Assembly on Tuesday and also witnessed proceedings of the Monsoon Session of the legislative body. The delegation met Assembly Speaker Vijender Gupta. 'Our shared democratic values and historic ties continue to guide the evolving partnership between India and the United Kingdom,' Gupta said during the courtesy meeting. During the interaction, the Assembly Speaker emphasised the strategic transformation of India-UK relations into a contemporary, multi-dimensional partnership shaped by frameworks such as the Comprehensive Economic and Trade Agreement (CETA) and the India-UK Vision 2035. The Speaker requested the delegation's assistance in facilitating access to valuable archival materials held by the British Council. In her remarks, Ghani expressed 'deep appreciation' for the hospitality extended by the Delhi Legislative Assembly and acknowledged both its historic legacy and its modern relevance. She commended the Assembly's strides in embracing digital innovation and sustainability.
Mint
5 days ago
- Business
- Mint
India-UK CETA: Let's not overlook what we gave up to secure this deal
Most reports on the recently-signed Comprehensive Economic and Trade Agreement (CETA) between India and the UK have focused on positive aspects of the agreement. But the CETA, as with any negotiated outcome, is also a compromise between the competing interests of the two countries. It is therefore important to understand the possible implications for India. Here are some key takeaways from this trade pact. First, with the UK eliminating customs duties on almost 99% of India's exports, significant opportunities would open up for labour-intensive sectors such as textiles and clothing, gems and jewellery and leather products, which currently face 4-16% duty. This will provide an edge for these exports over competitors from Bangladesh, China and Vietnam. However, an increase in India's exports of manufactured products would depend on the UK not imposing a carbon tax. The ability of exporters in labour-intensive sectors to scale up production of high-end products and comply with sustainability requirements will also be key. Also Read: Mint Quick Edit | India-UK FTA: Fair play in the trade arena Second, in the agriculture and marine sectors, most of India's exports will enjoy duty-free access. But two products of India's export interest—milled rice and sugar—will not receive tariff cuts. Further, to convert export potential into actual consignments, India's exporters of agricultural and marine products will have to comply with the UK's onerous health standards and traceability requirements. Due to high costs and technical complexities, this may be problematic for small exporters, thereby limiting their ability to benefit. Third, India's service exports to the UK, presently around $20 billion, are set to gain significantly, especially business services, IT/ITeS and professional services. In addition, the Double Contribution Convention is likely to benefit almost 75,000 Indian workers in the UK. That said, with the CETA silent on the UK granting 'data adequacy' status to India, our negotiators appear to have missed a golden opportunity to boost exports of digitally delivered services. Fourth, India has given deeper access to its government procurement market to the UK than it conceded to the UAE in its free trade agreement (FTA) with it. In procurements to be made under the Preference for Make In India Order, UK suppliers will be treated at par with Class 2 Indian suppliers, a concession that was not extended to UAE. This could undermine the Atmanirbhar Bharat and Make in India programmes. Also Read: Mint Quick Edit | An India-UK FTA at long last! Further, India has sharply lowered the threshold above which non-discriminatory treatment would apply to the procurement of goods and services from ₹225 crore in its FTA with the UAE to merely ₹5.5 crore under the CETA with London. This could hurt micro, small and medium enterprises (MSMEs) seeking government contracts, as they would now have to compete with UK suppliers even for low-value contracts above the ₹5.5 crore threshold. Since India has given the UK greater access to its government procurement market than it did to the UAE, it is likely to face strong pressure to offer even deeper concessions in ongoing trade talks with the EU and possibly the US. As annual procurement by the UK government from sources outside its territory and the EU has historically been very low—estimated to be less than £10 billion—Indian exporters are unlikely to make any substantial export gains in the UK government procurement market. Fifth, by recognizing that the preferable and optimal route to ensuring access to medicines is through voluntary licensing, India appears to have almost given up the possibility of using a provision for policy flexibility under the TRIPS Agreement at the World Trade Organization (WTO) to promote affordable healthcare—compulsory licensing. Arguing that voluntary licensing is a 'Global best practice'—as is being said in favour of the CETA's provision—would support Big Pharma's attempts at preventing developing countries from using WTO -compliant provisions such as compulsory licensing. This also risks eroding India's credibility as the voice of the Global South on international platforms related to health issues. Also Read: India-UK trade pact: A new paradigm for the digital economy Sixth, by agreeing to the broadly aligned template of developed countries on non-trade issues such as labour, environment and gender, India's implementation of its domestic laws and regulations on these will be subject to monitoring and scrutiny by London through various committees under the CETA—this looks like a loss of sovereignty for no obvious gain. These provisions could also open the door for more onerous and legally enforceable commitments in future trade agreements, including the imposition of trade sanctions for non-compliance. The fact that the CETA offers the UK extraordinary concessions on government procurement is a sombre reminder of what could happen on non-trade issues in India's ongoing bilateral negotiations. Overall, in the short-term, the India-UK CETA has the potential to lift India's exports to the UK to about $4 billion each year, as estimated by the UK government. However, alarm bells may start ringing if some of the possible adverse impacts materialize. These are the author's personal views. The author is an expert on international trade issues.
Mint
6 days ago
- Business
- Mint
The India-UK economic pact gives our digital trade the enablers it needed
Next Story Arpita Mukherjee The CETA's chapter on digital trade signals our ambitions in rule-setting for the 21st century. Its provisions are expected to give paperless electronic trade a big fillip and brighten the prospects of technology exporters. The recently signed Comprehensive Economic and Trade Agreement has attempted to remove many hurdles faced by the technology companies of both countries and enable them to work collaboratively. Gift this article With a strong mutual interest in supporting technology companies and enhancing cross-border dealings, the Digital Trade chapter of the India-UK Comprehensive Economic and Trade Agreement (CETA) is the most comprehensive one on the subject that India has signed in any trade agreement till date. With a strong mutual interest in supporting technology companies and enhancing cross-border dealings, the Digital Trade chapter of the India-UK Comprehensive Economic and Trade Agreement (CETA) is the most comprehensive one on the subject that India has signed in any trade agreement till date. Unlike the India-UAE digital trade chapter, India moved away from soft commitments (reflected in its use of language such as 'shall endeavour to do") to undertaking firm commitments (shall do) in order to maintain a legal framework consistent with international best practices, like those under the UNCITRAL Model Law of Ecommerce (1996). The chapter covers firm commitments in other areas as well. For example, it provides a legal framework for contracts to be concluded electronically, ensuring the legal validity of e-contracts. It would make trade administration documents available to the public in digital format and let administrative trade paperwork be submitted digitally as a legal equivalent of hard copies. These provisions are aligned with New Delhi's objective of Digital India and commitments to cross-border paperless trade. Also Read: Mint Quick Edit | An India-UK FTA at long last! All this can also lead to significant cost reduction for micro, small and medium enterprises (MSMEs). A study by the International Chamber of Commerce for UK and Coriolis in 2021 had estimated that digitizing transferable documents could boost MSME trade by 25% and lead to a 35% improvement in their business efficiency. Commitments in the digital trade chapter vis-a-vis India's position at the WTO: India refrained from joining the Joint Statement Initiative (JSI) under the World Trade Organization (WTO) framework, under which 80 member countries—with Australia, Singapore and Japan acting as co-conveners—reached a stabilized text. But many of the JSI's principles are part of the India-UK CETA's chapter on digital trade. For example, its provisions on paperless trade and its related aspects—such as e-invoicing, e-signatures and authentication and e-payments—have been covered by the CETA. This indicates that India is willing to commit to digital trade liberalization bilaterally with like-minded trade partners. Also Read: Mint Quick Edit | India-UK FTA: Fair play in the trade arena Controversial issues, such as the WTO moratorium on customs duty on digital imports and the associated revenue loss for developing countries have been smartly kept outside the CETA. The moratorium issue is a matter of multilateral discussion under the WTO Work Programme on E-commerce (WPEC), a forum in which WTO members including India agreed to not impose custom duties on electronic transmissions. This moratorium is renewed from time to time. It is currently applicable until the 14th WTO Ministerial Conference scheduled in March 2026, after which it is set to expire along with the WPEC. In all probability, customs duty will be held in abeyance, which will benefit Indian software exporters. The government's right to regulate and the private sector's demands: To secure the government's right to regulate the evolving digital sector, the India-UK agreement does not have any binding commitment to let data flow freely across borders, nor does it prohibit data-localization requirements. At the same time, it provides explicit protections for source codes and algorithms, a long-standing demand of the technology industry. One key contribution of this chapter is its support for the cross-border paperless trade framework led by the United Nations Economic and Social Commission for Asia and the Pacific (UNESCAP), aimed at reducing trade costs. According to the UNESCAP-ADB Asia-Pacific Trade Facilitation Report 2024, full implementation of those digital trade facilitation measures, over and above the commitments in the WTO's Trade Facilitation Agreement (TFA) to which India is a party, can reduce trade cost by about 11% in the region. This is important for enhancing the competitiveness of Indian firms in a world of geopolitical tension, tariff threats and supply chain challenges. India has already adopted several measures of the TFA to reduce delays and increase transparency by leveraging technology. Exporters have for a long time been asking for paperless trade. In the CETA, India has shown that it is ready to move towards a framework for it. This also enhances the scope for cross-border regulatory cooperation and mutual recognition. Recognizing the value of digital inclusion, the chapter lays appropriate emphasis on addressing digital trade barriers through cooperation. Laying out an inclusive framework for SMEs and women-led enterprises, it expects the two trade partners to cooperate in areas such as digital skills and access to digital tools. It attempts to ensure consumer and business trust in digital trade through various provisions, such as those on online consumer protection, unsolicited commercial e-messages and cybersecurity. Also Read: India-UK trade pact: A new paradigm for the digital economy It has some gaps but is a good chapter overall: While the chapter on digital trade in the India-UK CETA has some misses, such as its exclusion of a binding mechanism for dispute settlement, which would reduce its enforceability, it is a good attempt overall on India's part to showcase itself as a technology leader that is ready to drive cross-border digital trade policies. Along with some provisions in other chapters, the chapter aims for competitive market access in the domains of software development and network infrastructure, facilitate the cross-border mobility of professionals and reduce tariffs on technology goods, even as it upholds and supports existing partnerships between the two partners, such as the July 2024 India-UK Technology and Security Initiative. In all, the recently signed Comprehensive Economic and Trade Agreement has attempted to remove many hurdles faced by the technology companies of both countries and enable them to work collaboratively. The author is a professor, Indian Council for Research on International Economic Relations (Icrier). Topics You May Be Interested In Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
The Hindu
7 days ago
- Business
- The Hindu
How will Trump's tariffs impact India?
The story so far: On July 30, U.S. President Donald Trump announced 25% tariffs on imports from India 'plus a penalty'. While this puts to rest months of speculation over what the tariffs would be on Indian imports into the U.S., it opens up fresh uncertainties with respect to a potential bilateral trade agreement between India and the U.S. What did Mr. Trump announce? Taking to social media, Mr. Trump cited India's tariff and non-tariff measures on trade, and its dealing with Russia on energy and military equipment, as the main reasons behind imposing the 25% tariffs and the penalty. There is no clarity yet on what the penalty will look like, but Mr. Trump has in the past threatened a 10% additional tariff on BRICS countries. If this comes to pass, then effective tariffs on Indian imports would be 35%. There is also a legislation in the U.S. in the process of being passed that could see an additional 500% tariff on India, China, and Brazil for their dealings with Russia. What does it mean for India? Tariffs are paid by importers. Therefore, tariffs on Indian imports would be paid by those in the U.S. that are importing Indian goods. That is, Indian goods will become more expensive for them. Therein lies the true problem for India. On a macro level, the tariffs and the impact they will have on Indian exports are expected to only lower India's GDP by 0.2%, according to research by the Bank of Baroda. So, if India's growth forecast had been 6.6%, then these tariffs — if they are imposed — could lower growth to 6.4%. However, the issue arises in individual sectors. According to the Bank of Baroda, sectors such as garments, precious stones, auto parts, leather products, and electronics (although their inclusion is uncertain) could face the pinch and would have to rework their strategies. 'The issue really is that some of the competing nations like Vietnam (20%), Korea (15%) and Indonesia (19%) have lower tariffs compared with India,' the Bank of Baroda added in its research note. How did things come to such a pass? While most trade deals are negotiated over years, Prime Minister Narendra Modi and Mr. Trump in February 2025 announced that they would conclude the first tranche of a trade deal by fall. To put this in perspective, the recently-signed Comprehensive Economic and Trade Agreement between India and the U.K. took about three years to negotiate. What made the announcement by Mr. Modi and Mr. Trump notable was that it came before the latter's big moves on reciprocal tariffs, which is what pushed other countries to start negotiating with the U.S. The announcement was thus a strong and positive commitment towards strengthening ties between the two countries. But then, on April 2, Mr. Trump announced his Liberation Day reciprocal tariffs. These included a 10% baseline tariff for all countries, and additional tariffs on a country-by-country case. For India, this total was 26%. However, just a week later, Mr. Trump announced a 90-day pause on these tariffs so that bilateral deals could be struck so as to reduce the U.S.'s trade deficit with most of its trading partners. The 90-day pause was to end in July, but Mr. Trump extended it to August 1. What are the points of friction? It's hard to pinpoint any single recent development that has soured relations, but there have been several points of friction between the two countries in the past few months. The matter of India's tariffs and non-tariff barriers has been something Mr. Trump has been highlighting since his first term as President. It was no surprise that he would take up the issue in his second term. Soured relations: The Hindu editorial on Trump's 25% tariff, 'penalty' Mr. Trump has brought up India's engagement with Russia, too, saying countries like India are partly financing Russia's war with Ukraine. India, however, has reiterated that it will secure its national and energy security, and if that means buying cheap Russian oil, then that is what it would do. Russia currently accounts for about 35-40% of India's oil imports, making it a significant partner. In addition, India has remained adamant about keeping core parts of its agriculture and dairy sectors out of trade deals, including with the U.S. This has upset negotiators on the U.S. side, but it is a 'red line' India will not cross. Opening up these sectors would expose India's relatively low-productivity farmers to global competition, which will likely have devastating impacts on their livelihoods. Then, there is the fact that Mr. Trump has repeatedly stated that it was him, and his trade talks, that encouraged India and Pakistan to agree to a ceasefire following the launch of Operation Sindoor by India. The fact that the Indian government has refuted it has only further angered Mr. Trump. Mr. Trump's claims have irked the Indian establishment as well, since it has provided the Opposition a means to attack the government. India has informed the World Trade Organization that it reserves the right to impose additional tariffs on imports from the U.S. to retaliate against its higher tariffs on items like steel, aluminium, and automobiles. Taking these things together, Mr. Trump's tariff announcement comes as a confirmation that at least one, if not all of these factors, worked toward souring relations. Will India continue paying these tariffs? Although there has been a lot of talk about a 'mini-deal' between India and the U.S. to walk back the reciprocal tariffs, Indian officials have been cagey about the date for such a deal. The tariff announcement by Mr. Trump confirms that such a deal is not coming. However, the two sides have been remarkably consistent about their commitment of having some sort of trade deal finalised by the fall 2025 deadline. So far, negotiators from the two sides have met in New Delhi and Washington five times, including the first meeting in March where the Terms of Reference for the negotiations were finalised. The team from the U.S. will visit India in late August to take forward the talks. Things have, however, become trickier for Indian negotiators because Mr. Trump has now directly linked India's dealings with Russia to India's trade relationship with the U.S. The tariffs will come into effect soon. According to an Executive Order dated July 31, Mr. Trump said that his duties on India and other countries would come into effect '7 days after the date of this order'. What about deals with other countries? Over the last month, Mr. Trump has concluded deals with the U.K., Indonesia, the Philippines, Japan, the EU, and South Korea. The deal with the U.K. does not specify a general tariff level, but it will see British car exports to the U.S. attract a 10% tariff, down from the earlier 27.5% and a removal of tariffs on aerospace exports to the U.S. Japan negotiated lower tariffs of 15% for its exports to the U.S., the same as the EU.
Fibre2Fashion
02-08-2025
- Business
- Fibre2Fashion
Trump's penalty talks create unease in Indian textile industry
In what many see as a major escalation of trade tensions, US President Donald Trump on July 30 announced a sweeping 25 per cent tariff on all goods imported from India even as India's competitors, including Pakistan, Vietnam, Bangladesh and Turkiye, were levied lower tariffs of 15-20 per cent. The move has sparked concerns across sectors in India, especially after Trump also mentioned of an additional, unspecified penalty related to India's ongoing trade relations with Russia, specifically its purchases of crude oil. US President Donald Trump announced a 25 per cent tariff on all Indian imports. The move is compounded by Trump's warning of an unspecified penalty tied to India's ongoing trade relations with Russia, particularly its purchase of crude oil. The lack of clarity around the unspecified penalty has created unease in Indian business circles, especially among apparel exporters. While the announcement was made without detailing the nature of the additional penalty, industry leaders and policymakers are concerned over its ramifications and long-term implications. Reacting to the latest development, India's Ministry of Commerce and Industry issued an official response, as reported by various media outlets. The statement emphasised that the Indian Government is closely examining the implications of the US President's announcement. 'The Government is studying its implications. India and the US have been engaged in negotiations on concluding a fair, balanced and mutually beneficial bilateral trade agreement over the last few months. We remain committed to that objective,' the ministry reportedly underlined. The statement also reassured stakeholders that national interests would be protected. 'The Government attaches the utmost importance to protecting and promoting the welfare of our farmers, entrepreneurs, and MSMEs. The Government will take all steps necessary to secure our national interest, as has been the case with other trade agreements, including the latest Comprehensive Economic and Trade Agreement with the UK,' the ministry reportedly added. Adding another dimension, US Secretary of State Marco Rubio, just a day after Trump's tariff announcement, underlined Washington's dissatisfaction with India's continuing imports from Russia, as reported in certain sections of the media. 'India's purchase of oil from Russia is most certainly a point of irritation,' Rubio reportedly said speaking to a radio channel. Experts are thus viewing Trump's tariff imposition not just through the lens of protectionism, but as part of a broader geopolitical agenda. Some analysts believe the punitive measures reflect the US' discomfort with India's increasing strategic autonomy and its deepening economic engagement with Russia. Of particular concern to Indian exporters is the ambiguity surrounding the 'unspecified penalty' mentioned by Trump. The lack of clarity on this additional measure has created unease in the business circles. Sudhir Sekhri, chairman of the Apparel Export Promotion Council (AEPC) , reflected this sentiment, stating, 'The penalty is a grey area, and we hope the Government of India (GOI) will negotiate this with the US…' Echoing similar concerns, Rajeev Gupta, joint managing director of RSWM Ltd, earlier told Fibre2Fashion , 'Indian entrepreneurs and manufacturers are resilient, and we are confident that business momentum will be consistently rising with planned strategies. What remains crucial is clarity on the tariff position against China,' even as he added, 'A more pressing concern is the undefined penalty clause linked to India's ties with Russia, which adds a layer of uncertainty.' The timing of this development is critical, as both countries have been actively engaged in negotiations for a mutually beneficial trade agreement. India's recent efforts to diversify trade relationships, including the signing of the Comprehensive Economic and Trade Agreement (CETA) with the UK, many feel, signals a broader strategy to reduce dependence on any one market even as they added the US nonetheless remains one of India's largest trading partners, and any disruption in this relationship could have far-reaching implications for key export sectors such as textiles. 'The Free Trade Agreement with the UK opens up varied opportunities and is a welcoming move,' claimed an industry player interacting with Fibre2Fashion, who expressed apprehensions over the penalty ramifications if not sorted out soon. However, as things stand now, the Indian exporters seem to be adopting a cautious approach, a wait and watch policy to see how things unfold in the days to come as the steep duty imposed by US could hurt nearly half of India's exports, as per some estimates, adding to which is now the threat of additional penalty. Fibre2Fashion News Desk (DR)
