India-UK FTA: Piyush Goyal may meet exporters on May 8 to share pact details

Commerce Minister Piyush Goyal

Commerce minister Piyush Goyal is expected to chair a meeting with key trade promotion bodies on May 8 to share details of the free trade agreement (FTA) reached between India and the United Kingdom, a source said.

India and the United Kingdom secured a long-pending FTA on May 6, with Indian exports set to benefit from duty elimination on about 99 percent of the tariff lines, covering almost 100 percent of the trade value.

Exporters’ representatives are likely to seek clarity on the tariff cuts offered by India, especially on automobiles and if the concessions would also include electric vehicles.

"We need clarity on whether the cut on auto tariffs for the UK is for CBD (Complete Built-Up) or CKD (Completely Knocked Down) units. And if there is a minimum price ceiling along with the quota," the source said.

India has offered to slash tariffs on auto to 10 percent, under a quota, which is expected to benefit British high-end cars.

"Depending on how the quota has been fixed, we have to see what will be the impact on Indian auto industry. If a Range Rover vehicle is available with a duty of 10 percent then why would a BMW and Mercedes set up operation in India," the source added.

Exporters are also likely to seek clarity on the items on which India has gained concessions on tariffs from the UK.

According to a commerce ministry statement, the FTA is expected to boost exports of labour and technology intensive sectors such as textiles, marine products, leather, footwear, sports goods and toys, gems and jewellery.

Other key exports like engineering goods, auto parts and engines and organic chemicals are expected to get a boost too.

The British government said through the trade pact, Indian duties would be slashed, locking in reductions on 90 percent of tariff lines, with 85 percent of these becoming fully tariff-free within a decade.