Скачать или смотреть Shri Ashishkumar Chauhan,MD & CEO,NSE shares his views on the historic trade deal between India & UK

Shri Ashishkumar Chauhan, MD and CEO, NSE shares his views on the historic trade deal between India and UK


Today, 24th July 25, would be considered a historic day because today India and UK entered into a free trade agreement, which is a very important agreement in the history between two countries in terms of trade. Today, Honorable Prime Minister of India, Shri Narendra Modi, and Honorable Prime Minister of UK, Shri K Starmer, both along with the Commerce Ministers on both sides were present along with other important ministers. The free trade agreement between two countries is actually independent in a way of the multilateral arrangements that India has had in terms of WTO and other things.


This is actually because 99% of all the exports, which India does, will now be covered under this. And almost zero tax, almost all of them will attract from fisheries to agriculture, to pharmaceuticals, to engineering exports, to literally every aspect, including cars and electric cars. We are going to have a free trade, literally zero tax from goods getting exported from India.


Today, India and UK have a bilateral trade of around $56 billion, out of which $24 billion is merchandise exports and $32 billion is services. $24 billion is merchandise trade. And India is overall around $10 to $12 billion in surplus.


But going forward, Indian professionals working in UK will not have to pay up to three years of social security tax, because they're not going to stay there for longer. And till the time they were paying that and almost 4000 crore a year, even now is going to be saved. Going forward, the visa framework is going to be easier and even Indian professionals will be able to work without office for a very long period.


So I think that overall, there's going to be much larger saving going forward. Total target is to increase the bilateral trade from current $56 billion to $120 billion and probably it will be even larger because the leather and textiles and other goods exports itself, which used to attract some amount of tariff will be zero taxed and it will create a huge amount of jobs in India going forward.


So for me, this is also a template for India to do a free trade agreement with other countries like US or EU, and even Japan for that matter. And that's going to be an interesting play. The other part is that the free trade agreement was being discussed for years between the Conservative government and the Indian BJP government for years. And when the Labour government came into play last year at UK, many people thought that now the free trade agreement between India and UK may not happen. But things have gone in the right direction. Today, I was there at the Honourable UK Prime Minister's country residence where this historic deal was signed.


And that has removed a lot of cobwebs between the relationship between two countries, but also started a new chapter and kind of a first stepping stone because the entire multilateral trading system is slowly breaking down and the US is a leader in terms of ensuring that this happens. The breaking down of multilateral framework, which was against the US's interest and against even EU or UK or India's interest is actually happening.


UK has taken lead in signing this particular agreement despite the new government taking the baton from the older government to discuss with us. Naturally, India had to also give some concessions to their side where almost 90% of their exports to India will also be in a way going at a very low duty or almost duty free. And they expect to have many Indian companies set up a shop in AI, in many other places or many other industries in UK.


And so UK also expects to benefit quite a lot in terms of creation of more jobs. And naturally, India has also need for creating jobs and also increasing its exports to developed countries where the relation can be good. India has become very good, not only in services, but now also high tech exports like mobile phones and servers and other things and now even chips are going to be exported. But overall, this is a win-win deal which has been signed. And I'm sure we need to also thank the Honourable Prime Minister Shri Narendra Modi Ji but in addition, we also need to thank the Commerce Minister Shri Piyush Goyal Ji for sticking to the agenda and getting a very beneficial trade agreement, SEPA, between India and UK signed today.

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