India-UK Comprehensive Economic and Trade Agreement
During the prime minister’s visit to the United Kingdom, India and the UK finalized a Comprehensive Economic and Trade Agreement, marking the most expansive trade deal India has agreed to in recent years.
Political and Economic Shifts
- Initial resistance from India towards tariff reduction without visa or migration components.
- Changed political climate in the UK led to limited migration concessions of 1,800 additional professional visas.
- Avoidance of potential controversies, like the double contributions to savings schemes.
Future Prospects with the EU
- This agreement opens discussions for a similar FTA with the European Union (EU), with a deadline set for the end of the year.
- India's concessions to the UK have not raised significant political concerns, allowing for deeper tariff cuts with the EU.
- The EU's significant manufacturing power and role in global supply chains present large economic opportunities.
Challenges with the United States
- India must also consider protecting market access and trade surplus with the United States (US) amidst looming high tariff deadlines.
- Japan and the UK have already made deals with the US, often unfavorable.
- The UK faces a 10% baseline tariff, while Japan has agreed to significant concessions.
- India needs to evaluate potential concessions and settlements with the US.
