Don't expect big bang from India-UK FTA, says GTRI

AS INDIA-UK free trade agreement negotiations enter the final leg, a study has found that it is unlikely to result in immediate gains for India's exports and the industry would have to still work the old-fashioned way to grab a greater share of the UK market.

- MUESH JAGOTA

The 13th round of negotiations on FTA are underway in New Delhi at present and expectations are that the process may be wrapped up by this month-end and the pact will be ready for signing.

The non-traditional sectors like petroleum products, diamonds, machinery and pharma that have been the drivers of exports in recent years are already enjoying zero duty in the UK are unlikely to benefit from the FTA, the report prepared by co-founder of Global Trade Research Initiative Ajay Srivastava said.

In traditional sectors the duties that face in the UK range from 4% to 16% with the average tariff coming to 4.2%, which is moderate.

Yarn and fabric face a duty of 4%, garments and home linen are taxed at 10-12% and footwear face duties of 4% to 16%.

Of the total $11.4 billion worth of exports to the UK in the last financial year, $6 billion came from the newer sectors where duties are already nil while the rest came from traditional sectors.