India`s high-quality labour-intensive goods to benefit from removal of import duties by UK: GTRI
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The Global Trade Research Initiative (GTRI) has said that India's high-quality labour-intensive goods such as apparel, footwear, carpets and cars will benefit from the removal of import duties by the UK, under the proposed free trade agreement (FTA) between the two countries. However, it said the overall gains for India will be limited because most of the goods from here are already entering the UK at low or zero tariffs (import or customs duties).
According to GTRI, in 2022-23, India's merchandise exports to the UK were valued at $11.41 billion and out of this, $6 billion worth of goods such as petroleum products, medicines, diamonds, machine parts, airplanes, and wooden furniture entered Britain at zero levy. The FTA is expected to have a limited impact on increasing these exports because over half of Indian products already enter the UK with low or no tariffs. The average duty on goods imported from India into the UK is 4.2 per cent.
However, the think tank said there will be gains from reducing duties for Indian exports worth $5 billion and those items include textiles, apparel (shirts, trousers, women's dresses, bed linen), footwear, carpets, cars, marine products, grapes, and mangoes. These products face relatively low to moderate tariffs in the UK. Citing examples, it said that duties on yarn and fabric are 4 per cent, while tariffs on shirts, trousers, women's dresses, and bed linen range from 10 per cent to 12 per cent. Similarly, handbags and trunk cases attract 8 per cent tariffs, levies on footwear vary from 4 per cent to 16 per cent. These products will benefit from the FTA's tariff reductions by the UK.
It further stated that chief negotiators of both the countries are negotiating the pact in the national capital and talks are at a crucial stage, as the negotiations are expected to close by end of this month. It added that while the duty elimination in the UK can help Indian exports, significant growth requires improvements in product quality and signing an FTA alone may not lead to a substantial increase in India's labour-intensive goods exports.
