There is euphoria in many quarters in India about the free trade agreement (FTA) with the UK. Abhijit Das, former head of the Centre for WTO Studies in Delhi, believes that there will be gains for labour intensive sectors ranging from textiles and clothing, leather goods, even marine products and spices.
“If we focus just on goods and services there are good reasons to be optimistic about the prospects of Indian exporters, whether they will be able to take advantage of the opportunities will depend on may other factors,” Das said.
He cited a study by the UK Department of Trade, which says that by 2040, bilateral trade with India would increase by 25 billion pounds or over $33 billion dollars because of the FTA. Of this around 15 billion pounds (more than $20 billion) would accrue to the UK and 10 billion pounds (over $13 billion) would accrue to India.
Given that India’s total export of goods and services is around $825 billion, an increase of $13 billion would seem like small change. That apart, Das points to a host of other issues that come up which could prove problematic for India.
“In agriculture we have stuck to our red lines, protected our interests … and managed to get the UK to reduce tariffs on some products, some spices, marine sector as well … provided our exporters are able to meet sanitary and phyto-sanitary requirements imposed by the UK … which can be quite onerous.”
This is where government help becomes crucial to help Indian exporters meet those requirements, he said.
In government procurement, “we have committed to giving non-discriminatory treatment to UK suppliers of goods and services … in other words goods that originate in the UK will be treated at par with Indian Class 2 suppliers. This is a substantial concession.”
This could impact the Make in India programme. The tricky part is India would have to make the same or larger concessions in its negotiations with the European Union and the US going forward.
Tune in for more in this conversation with Abhijit Das, former head of the Centre for WTO Studies.
