The landmark India-UK Comprehensive Economic and Trade Agreement (CETA) will make Indian farmers, fishermen, artisans and small businesses shine globally, create numerous jobs and help the common man get high-quality goods at competitive rates in line with the vision of Prime Minister Narendra Modi.
This follows similar agreements with other developed countries including Australia, European Free Trade Associationcountries and UAE. It is a part of the Modi government’s strategy to maximize economic growth and job creation to achieve the dream of Viksit Bharat 2047.
PM’s Strategy
In 2014, the Modi government adopted a determined strategy to rebuild global confidence in the Indian economy and make it attractive for Indian and foreign investors. Signing FTAs with developed countries is a part of this wider strategy. FTAs also increase investor confidence by removing uncertainty about trade policies.
FTAs with developed countries, which do not have competing trade interests with India, is a win-win situation, unlike the previous regime’s approach of endangering Indian businesses by recklessly opening India’s doors to competitors.
During UPA’s regime, developed countries had abandoned trade talks with India, which was then regarded as one of the “Fragile Five” economies of the world. Under PM Modi’s leadership, India’s GDP has almost tripled since 2014 to about Rs 331 lakh crore. Game-changing reforms, ease of doing business and the PM’s global stature helped India emerge as a compelling opportunity. Today, the world wants to participate in the irresistible India story – and sign FTAs.
Market Access, competitive edge
CETA will ensure comprehensive market access for Indian goods in the UK market across all sectors. It eliminates tariffs on about 99% of the tariff lines covering almost 100% of the trade value. This creates huge opportunities for the $56 billion bilateral trade, which is estimated to double by 2030 with the help CETA.
Small businesses will prosper as Indian products will have a clear competitive edge over rivals.Companies that make soccer balls, cricket gear, rugby balls and toys, among other products, are poised to significantly expand business in the UK.
Numerous Jobs
India’s competitive will boost exports substantially and trigger a wave of investment and job creation. India is well-positioned to become one of the top three suppliers to the UK in textiles, leather, and footwear, which will help small businesses, artisans including women, and craftsmen emerge as key players in global value chains.
Gems & jewellery, engineering goods, chemicals and electronic products such as phonesare also expected to see exports jump.
Farmers First
Over 95% of agricultural and processed food tariff lines will attract zero duty, paving the way for rapid rise in agri-exports and rural prosperity.
Duty-free market access is estimated to increase agri exports by over 20% in three years, contributing to India’s goal of $100 billion agri-exports by 2030 as the CETAunlocks the premium UK market for Indian farmers, matching or exceeding the benefits enjoyed by Germany, Netherlands, and other EU nations.
Turmeric, pepper, cardamom, and processed goods like mango pulp, pickles, and pulses will also getduty-free access. Higher exports will boost farm income and give greater incentives for quality, packaging and certification. It will create numerous jobs across the agricultural value chain.
Protecting the vulnerable
CETA excludes India’s most sensitive agri sectors to protect domestic farmers. India has given no tariff concessions on dairy products, applies, oats and cooking oils.
These exclusions reflect the Modi government’s strategy of prioritizing food security, domestic price stability, and vulnerable farming communities.
Fishermen to flourish
Indian fishermen, particularly those in Andhra Pradesh, Odisha, Kerala, and Tamil Nadu, will see dramatic expansion through access to UK’s marine import market.
UK’s import duty on shrimp and other marine products will fall to zero from the current level of up to 20%.
The potential is phenomenal as India has only a 2.25% of UK’s $5.4 billion marine imports.
Services & Professionals
The agreement will catalyze services including IT/ITeS, financial services and education, creating new avenues for Indians. India has secured favourable mobility provisions for skilled professionals, including contractual service providers, business travelers, investors, yoga instructors, musicians and chefs.
Innovative FTAs
Under the leadership of PM Modi, India’s FTAs go far beyond goods and services. They set new benchmarks. With EFTA countries, India had secured a binding commitment of $100 billion investment that will create 1 million direct jobs in India. With the Australian FTA, India resolved the double-taxation issue that was troubling IT companies.
One of the most significant aspects of the agreement with UK is the Double Contribution Convention. This exempts employers and temporary Indian workers in UK from social security contributions for three years. This will significantly enhance the competitiveness of Indian service providers.
Quality Goods for Consumer
Trade agreements increase competition, which helps Indian consumers get high-quality goods at competitive prices. The Modi government has provided policy support, issued Quality Control Orders and negotiated FTAs to encourage and incentivize quality.
The government has held extensive stakeholder consultation with industry and other stakeholders before signing any FTA. It is heartening to note that industry bodies have overwhelmingly supported and welcomed every FTA signed by the Modi government.
CETA is a benchmark for equitable and ambitious trade deals between large economies. It opens up attractive global opportunities for the underprivileged, without compromising our core interests. It is a shining example of how New India does business.
(The Author is Union Minister of Commerce and Industry, Govt of India. Courtesy: PIB)
