What are the gains from the India-U.K. trade deal?, Pg14

Key Highlights:

• The India-U.K. Comprehensive Economic and Trade Agreement (CETA) and the India-U.K. Double Contribution Convention (DCC) came into effect on July 15.
• The U.K. will immediately remove tariffs on 96.8% of its tariff lines, covering 97.7% of trade value from India.
• India will immediately remove tariffs on goods accounting for 30.3% of trade value from the U.K.
• The DCC exempts Indian workers in the U.K. from paying social security there for up to five years if they are paying in India, benefiting over 75,000 workers.
• India has agreed to reduce tariffs on automobile imports from the U.K. for the first time, with specific quotas for vehicles.

Detailed Insights:

• The CETA is described as a "gold standard" agreement, covering a wide range of tariff and non-tariff issues, including digital trade, government procurement, and services.
• For India, the deal provides commercial presence rights for Indian companies in U.K. sectors like computer services and consultancy.
• The DCC addresses the issue of Indian workers contributing to the U.K. social security system without being able to claim benefits due to the 10-year contribution rule.
• For the U.K., the agreement will make products like whiskey, cars, and engineering goods cheaper in India.
• India has opened key service sectors such as accounting, auditing, and financial services to U.K. firms, and will recognize U.K. professional qualifications.
• Under government procurement, U.K. firms can participate in Indian Central government bids as Class-II local suppliers, while Indian suppliers receive Class-I local supplier preference in the U.K.
• Notable exclusions from the deal include a dedicated investment agreement and a resolution on investor-state dispute mechanisms, following India's cancellation of Bilateral Investment Treaties (BITs) in 2017.
• The deal also did not include concessions from the U.K. regarding its upcoming Carbon Border Adjustment Mechanism (CBAM) tariffs.

Key Concepts Involved:

• Comprehensive Economic and Trade Agreement (CETA): A broad free trade agreement covering goods, services, investment, and other economic cooperation areas.
• Double Contribution Convention (DCC): An agreement preventing individuals from paying social security contributions in two countries simultaneously.
• Sanitary and Phytosanitary Measures (SPS): Regulations to protect human, animal, or plant life or health from risks arising from food, diseases, or pests.
• Technical Barriers to Trade (TBT): Non-tariff barriers to trade that arise from technical regulations, standards, and conformity assessment procedures.