Scotch, automobile tariffs key challenges for India and Britain
LONDON: Reducing the high tariff in India on Scotch whisky and automobiles is one of the top challenges in the free trade agreement that the Theresa May government hopes to sign with India after Brexit, as an official briefing estimates a 26% growth in bilateral trade.
Informal talks on the FTA have begun, though the formal process cannot start until Britain completes its exit from the European Union by March 2019.
According to a briefing by London-based Commonwealth Secretariat economist Rashmi Banga, the UK’s exports to India after Brexit will increase by 33% per annum, while the UK’s imports from India will increase by 12% per annum.
“A plausible reason for there being a higher increase in the number of exports from the UK to India... is that India imposes higher tariffs than the UK does,” the briefing said.
London-based experts say the Commonwealth briefing projects, the maximum potential under an FTA that reduces all tariff to zero, even if the reality is likely to be less optimistic.
Banga’s analysis states that India’s imports from the UK are estimated to increase from $5.2 billion to $7.8 billion, while the UK’s imports from India would rise by only 12% from 2015. “One reason is because many products from India are already subject to low UK tariffs,” it stated.