The United Kingdom and India have reached a “historical” commercial agreement after three years of negotiations between the two countries.
The agreement will result in significant reductions on the fee of tariffs imposed on the assets of the United Kingdom exported to India, with the aim of doing more business with the fast -growing economy of India of around 1.4 billion people.
In general, there will be reductions in 90% of individual rate rates in the United Kingdom exports, with 85% of those who become completely free of rates in a decade.
The Government highlighted a dramatic cut for levies on whiskey and gin exports, and rates were reduced by half from 150% to 75% before reducing 40% in the tenth year of the agreement.
It is understood that it is the first reduction of its kind for whiskey exports, with a recent commercial agreement between India and Japan that does not result in lower rates for the spirit, although Japan is a key producer.
Also seeing the tariffs cut the automotive sector, with rates that decrease from more than 100% to 10% as part of the agreement.
It provides an impulse to two sectors that seem especially affected by Donald Trump's rates, which increase the speed that US companies will be charged for importing products, including cars, car parts and materials.
The lowest tariffs on the United Kingdom exports to India also include: – Aerospace – cosmetics – food products that include lamb and salmon, chocolate and cookies – soft drinks – advanced machinery, electrical circuits and drivers – medical devices
Meanwhile, the United Kingdom consumers are expected to benefit from a variety of rates that are reduced to Indian exports to the United Kingdom as part of the negotiations between the two countries.
In particular, the Government agreed to eliminate a tax on Indian textiles, an important source of employment in India and incorporate some of the most paid workers in the country.
The lowest tariffs about Indian exports to the United Kingdom also include:
– Textiles and clothing, footwear and leather – Food products that include frozen prawns – jewels and gems – sporting and toys – auto parts and engines
In addition, the negotiations saw the Government to grant the changes that will facilitate that Indian professionals come to the United Kingdom.
India assured an agreement known as a double contribution convention (DCC), which means that Indian workers temporarily in the United Kingdom and their employers will not have to pay the national insurance contributions in both countries for three years.
The same will apply to British workers in India.
It is expected to be more attractive to Indian professionals to work in the United Kingdom.
However, there will be no formal changes in immigration policy under the new commercial agreement.
Another compensation in the agreement will make it easier for Indian musicians, chefs and yoga instructors to work in the United Kingdom.
This is because a limited number of workers in these professions may request visas, since it did not previously have an accessible route to the labor market.
It is understood that the concession was a specific application of India in negotiations.
On the other hand, there were certain elements that both parties refused to go back and, therefore, have not changed in the new commercial agreement.
The United Kingdom has not reduced tariffs on ground rice that comes from India, due to concerns about how it would affect other producers, and India has not changed tariffs on dairy exports of the United Kingdom.
