Ahead of new bilateral trade negotiations, India may re-evaluate tariff concessions provided to Britain on goods like Scotch whisky if London does not address New Delhi’s concerns over impending steel measures, as per media reports.
The free trade agreement between India and the UK, which was agreed in May of last year and is scheduled to go into effect this year, has encountered difficulties after Britain suggested lowering quotas and raising taxes on steel imports in order to safeguard its domestic sector.
The trade agreement was expected to open up new business opportunities for companies on both sides, lower tariffs in a number of industries, and strengthen commercial relations between two of the biggest economies in the world, making the disagreement especially noteworthy.
An Indian trade official told media on Monday, “So now the ball is in their (UK) court.”
“If they do not leverage their free trade agreement, we can always reconsider the concessions we offered.”
British Trade Secretary Peter Kyle said in a statement that the free trade agreement was mutually beneficial and would “unlock massive opportunities”. Kyle is scheduled to meet with Commerce Minister Piyush Goyal in India on Tuesday.
In the statement, Kyle stated, “I look forward to working with Piyush Goyal to make sure everybody can start to feel the benefits as soon as possible.” Steel negotiations were not mentioned.
Steel is not included in the talks to execute the free trade deal, according to a UK official.
India committed to lowering its tariffs on Scotch whisky from 150 to 75 per cent at first and then to 40 per cent over a ten-year period as part of the trade agreement.
In addition to increasing market access for companies in the world’s fifth and sixth largest economies, the agreement calls for tariff reductions on a number of items, including vehicles, whisky, and textiles.
By 2040, the two countries expect that the deal will increase bilateral commerce by an extra 25.5 billion pounds (USD 34 billion).
Meanwhile, concerns about Britain’s new steel regulations have been voiced at the World Trade Organisation by India, Brazil, Turkey, Japan, South Korea, Switzerland, and Australia.
India argues they might restrict Indian exports’ access to markets. Even as both sides seek to implement the trade agreement, officials noted that tariff-free quotas and higher levies on some steel imports would create further uncertainty for Indian exporters.
