Prime Minister Narendra Modi is in Britain these days on a two -day visit. A historic agreement between India and the United Kingdom (UK) is being finalized during this visit from 23 to 24 July. India-UK Free Trade Agreement (FTA). This deal has already been approved by the Union Cabinet of India and is now preparing to formalize it with the signature of PM Modi in Britain. The impact of this free trade agreement will not be limited only to companies or traders, but it will also have a direct impact on the pocket of the common man. Many things can be cheap, then there is a possibility of increasing prices on some.
What is a free trade agreement (FTA)?
Free trade agreement ie Free Trade Agreement. An agreement in which two countries either decrease the custom duty on import-export between each other or eliminate it completely. The advantage of this is that the products of both countries reach each other’s market at cheap prices. Under India-UK FTA, 99% of the products from India to UK will not be taxed, while India will reduce tax on 90% of goods coming from UK.
These things can be cheaper
- Mobile, laptops and gadgets: Tax cuts on electronic products can make these things cheaper.
- Shoes, clothes and fashion products: Now they will either be charged zero tax or very little, due to which their prices can fall in the market.
- Jewelery and jewelry: Due to decrease in custom duty on jewelery coming from the UK, their prices can also decrease.
- Leather products: Lader jackets, bags and shoes can now be found at affordable prices.
Mixed effect on drug prices
The trade of medicines is two -way between India and the UK. India also exports drugs to the UK and imports from there. Therefore, the prices of some drugs may decrease after FTA, but in some cases may also be expensive. Its direct effect will be on how much tariffs the two countries reduce on which medicine.
These things can also be expensive
- High-end vehicles and bikes: Their prices can increase due to relatively low tax exemption on luxury vehicles coming from UK.
- Metal and steel products: India will now give the UK high-quality metal in the domestic market, which will increase the pressure on domestic industries and increase prices.
No relief on agricultural products at present
Agricultural products like paddy, wheat will not get any direct relief from this deal. The Government of India has avoided reducing tariffs in this sector so that domestic farmers do not suffer losses.
This deal can be helpful in reducing unemployment
Indian manufacturing, textile, marine and jewelery sectors are expected to get a big benefit from this trade deal. With easy access to the large market of UK, India’s exports can increase, which will also create new employment opportunities.