Prime Minister Narendra Modi is currently on a trip to Britain, and this is his fourth tour of Britain. He said, "This is not just an economic agreement, but a plan for collective prosperity of the two countries." Modi further added that this agreement would give Indian textile, footwear, gems and jewelry, sea food and engineering products more access to Britain’s market. The British market will also bring new opportunities for the Indian agriculture and food processing industry.
This agreement will be especially beneficial for Indian farmers, fishermen and MSMEs. On the other hand, products such as medical equipment and aerospace parts made in Britain will become more easily available and compact for the people of India and the industry. Remember that some opposition leaders of Britain have warned that the agreement could affect British workers as the exemption of ‘National Insurance’ contribution to Indian workers has been extended for three years. However, Britain’s trade minister has denied the claim.
How big is this agreement? : The British government has stated that the trade agreement will contribute to Britain’s economy of £ 4.8 billion (approximately $ 6.5 billion) per year. Currently, Britain exports only 1.9% of its total exports towards India and imports 1.8% of the total imports. However, the figures are expected to increase with this agreement. Prime Minister Modi is aiming to reach exports to $ 1 trillion by 2030, and Britain is becoming the most important partner. The discussion of the agreement began in 2022 during the tenure of Britain’s Prime Minister Boris Johnson.
How much reduction in tariffs? : The average tariff on Britain’s export products will decrease from 15% to 3%, which will make it easier for British companies to sell in India. The tariff from India imported from Britain has been reduced from 150% to 75%. It is also an opinion to unload the tariff by 40% by the year 2035. Because of this, foods like Britain’s medical equipment, aerospace, electricals, viscosi, mazs, biscuits, chocolates will be cheaper in India. Indian clothing and jewelry will be cheaper in Britain on the other hand.
What will change for Indian professionals? : British Prime Minister Starmer has claimed that the agreement will create more than 2,200 new jobs in Britain. According to the understanding, an Indian employee who will go to Britain on time or who will work in India, will only have to pay social security contributions in their own country. Such arrangements have already made Britain with 17 countries, including the European Union, the United States and South Korea. British Trade Minister Reynolds has clearly stated that keeping an Indian employee will not give any tax benefit, which makes it cheaper against a British employee. In fact, visas and NHS surcharges will cost more on Indian employees.
What issues are still under discussion? : In this agreement, Britain did not get access to India’s financial and legal services, which he expected. Currently discussions are underway for a bilateral investment agreement between the two countries, which aims to secure each other’s investments. At the same time, there is a debate over the plan to impose taxes on high carbon emissions by Britain. India believes that this could affect its exports. Britain from January "Carbon Border Adjustment" Will apply, which may impose an additional tax on India’s products.
Security and intelligence cooperation: Both the Prime Ministers have agreed to increase cooperation in areas such as defense, education, weather, technology and innovation between India-Britain. The distribution of intelligence and operational cooperation will help fight corruption, serious fraud, organized crimes and illegal attitude. The new contract will also be finalized for the offender record deal, which will facilitate legal action and apply a travel ben. The agreement has been approved by the Cabinet of India, but it is yet to be approved by Parliament. It will take at least one year to implement the contract. (All image – Getty Image)
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