The United Kingdom’s trade deal recently created attention due to its ability to reshape economic relations between the two countries. In essence, the agreement aims to dismantle commercial barriers, especially through customs tariff cuts. For consumers in the UK, this means that you can get cheaper clothes, shoes, food and jewelry. Meanwhile, India will benefit from a much lower tariff on a group of British goods, including the required elements such as whiskey, medical devices, cosmetics, biscuits and luxury cars.
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While the deal undoubtedly opens new ways of trade, its total impact requires a measure of measurement. Reduction of “high definitions is ridiculous” in the goods in India, a welcome step, which may enhance UK exports and provide Indian consumers by reaching high -quality products. However, the expected economic gains of the United Kingdom, with only 0.13 % GDP increased, indicates that the deal did not affect economic growth as much as possible.
The trade deal in the United Kingdom and India has been promoted as a great milestone in strengthening economic relations between the two countries. As the United Kingdom is currently importing 11 billion pounds from India, the new agreement is to reduce customs tariffs and make Indian exports more competitive. For UK exporters, the deal is scheduled to reduce the average definitions from 15 % to 3 %, significantly reduces the path of British companies to sell their goods in the Indian market.
One of the most prominent achievements in the deal is to reduce the high definitions in India on whiskey. While the customs tariff of up to 150 % was a long time, the UK has successfully negotiated a reduction to 75 %, a great victory for British companies. Moreover, these definitions are scheduled to decrease by 40 % by 2035, which enhances the competitiveness of whiskey in the UK in India.
The agreement also brings welcoming news to UK auto manufacturers, which will witness a decrease in tariffs from 110 % to 10 %. This reduction is preparing to increase car exports in the United Kingdom to India, providing a large boost for the UK auto industry. While the general economic impact of the deal may be modest, these specified tariff cuts represent concrete victories for the main sectors of the British economy.
The UK’s success in securing a less tariff for its exports to India is undoubtedly a positive step. This agreement is to facilitate access to British exporters from reaching the Indian market, which may enhance business and create new opportunities. The expected addition of 2000 jobs in the UK is also a welcome possibility, as it provides concrete benefits to the local economy.
However, while the deal represents progress, it is important to recognize its restrictions. In my opinion, the agreement does not go enough to address the full capabilities of the trade relationship in the United Kingdom and India. While customs tariff cuts are important, there may be other unbearable obstacles and organizational obstacles that still hinder trade and investment between the two countries.
To completely achieve the benefits of close economic relations, future negotiations should focus on a more comprehensive approach. This can include address issues such as intellectual property protection, organizational alignment, and mutual standards.
The UK government offers that the commercial deal with India will increase the gross domestic product by 0.13 %, equivalent to 4.8 billion pounds. While this deal opens the Indian markets, UK exports to India are expected to enhance 60 % (15.7 billion pounds) and increase Indian imports to the United Kingdom by 25 % (9.8 billion pounds) in the long term, the effect of GDP is modest. The estimated increase of 0.19 % in the real wages of UK workers, equivalent to 2.2 billion pounds, indicates limited advantages of the workforce.
Although these numbers are positive, the total effect on the British economy seems relatively small in my opinion. The capabilities of the deal to improve the financial welfare of UK workers may be significantly lower than it was first hoped for. Although it is better to have a deal that there is no deal, especially given the Conservative Party’s efforts to secure it, this agreement may not be the most useful result.
I generally support free and mutual trade agreements, but this particular deal seems to be a relatively small win for the United Kingdom. Although I praise the Prime Minister to finish the touches on the agreement, its impact on GDP and economic growth seems limited. I understand that this commercial deal mainly focuses on reducing the customs tariff to provide British companies with more access to Indian markets. If the primary goal is to significant economic growth, the UK government is likely to follow a more influential agreement.
The numbers associated with this deal do not indicate major economic gains. I don’t try to reduce its importance, but given the unemployment rate in the UK of 4.7 % (1.2 million people), only 2000 jobs will have a significant impact.
It is always best to get a commercial deal not to have a deal at all. Congratulations to our government on the completion of this agreement. India is expected to become the third largest economy in the world by 2030, according to global economic expectations. This deal provides the UK values to the Indian market, which puts us in our position to benefit from its growth.
