DC Edit | Trade Deal A ‘Win-win’ For Both India, Britain

At a time when multilateralism is fading fast even as Trump tariff tantrums are triggering bizarre responses, India has staged a global trading coup in signing a forward-looking Comprehensive Economic and Trade Agreement (CETA) with the United Kingdom. Three years of delicate negotiations are behind this landmark deal that could lead to shared prosperity if the projections play out as intended once the British Parliament gives its assent.

Seen against the background of the East India Company and then the British Crown plundering India which was once the world’s largest economy, it is the sense of equity behind modern thinking, devoid of the baggage of old, that distinguishes the ties between an evolved western economy and a growing eastern one. History takes its place in the rearview mirror as an old empire and a relatively new democracy resolves to trade as equals from now.

The details are in the fine print but the fact that luxury car bookings are being cancelled or deferred while awaiting the promised reduction of duties on British SUVs is a clear indication that the buyers’ market is in fast forward mode already. But even as quotas open for British cars, electric vehicle producers are to be protected as they have made huge investments to make their cars in India.

Scotch drinkers may pay progressively less in the future even as the spirit matures in casks but it’s only a sub-plot which is, however, emotionally important for the British as their exports are being taxed at 150 per cent. It may be a while before prices come down in bars and vends in India, but the reduction in duties is a concession that removed an impediment that was dogging the negotiations.

What is of the greatest significance is that India has stood steadfast on protecting its domestic agricultural economy from international market forces while going ahead with offering vast reductions in tariffs and duties on virtually everything else and not just on cars and alcohol. The UK will eliminate tariffs on 99 per cent of Indian exports, which means Indian agricultural products and processed foods may also gain free access to the British market.

In the light of tougher negotiations with Trump’s US that may not be willing to be so accommodative regarding India’s concerns for its foodgrain, dairy and fruit farmers, what has been achieved may make an ideal template for deals with other economies of the first world and others too. It may have taken time and patience to keep stonewalling, but an important principle has been upheld to preserve the interest of a vast section of Indians who depend on agriculture.

The easy access that India gets to products of more advanced technological industries as in aerospace, medical devices, semiconductors and cyber security that are readily available in the UK is another reason to cheer the comprehensive deal. Ease of business is also being promised though scepticism will remain due to India’s sluggish bureaucracy and notorious red tape.

The benefits to skilled Indian workers, who can take jobs in the UK and not pay for their social security for three years while also avoiding double taxation and saving money for themselves just as India stands to gain too, are more reasons why the deal is being seen to be favourable to India while the UK believes its people will gain from a vital partnership with an old ally at a time of global churning in trade. It is easy to spot a win-win situation here, provided the will to follow through in letter and spirit is seen equally in India and in the UK.