<p>New Delhi: Auto, dairy, and agricultural products had been the sticky issues during 15 rounds of negotiations from January 2022 to this May that resulted in India and the <a href="https://www.deccanherald.com/tags/united-kingdom">UK</a> on Thursday signing the Comprehensive Economic and Trade Agreement (CETA), which seeks to boost trade by lowering tariffs.</p>.<p>Union Commerce and Industry Minister Piyush Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds inked the agreement in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer in London on Thursday. </p>.<p>The implementation will take at least six to 12 months as it needs to be approved by the British parliament. No such approval is required in India.</p>.<p>Dairy and farm sectors are politically sensitive, as they impact the livelihood of a large number of people in India. The Modi government has not budged on this issue. Thus, India has not given any tariff concessions to the UK for the import of dairy, apples, and edible oils.</p>.<p>One of the most significant shifts in India’s foreign trade policy in this deal is related to the automobile sector.</p>.UK to import smartphones, optical fibre cables, inverters at zero duty from India under FTA.<p>India has agreed to cut duty on British cars to 10 per cent over five years from 110 per cent now. However, there will be several conditions.</p>.<p>No concessions have been given to electric, hybrid, and hydrogen-powered vehicles.</p>.<p>Moreover, there will be a quota. The number of Internal Combustion Engine (ICE) vehicles shall be reduced by the number of EV vehicles getting concessions from the sixth year to maintain the total quota volume of 37,000 units at the end of 15 years of duty concession, said official sources.</p>.<p>Analysts say the policy would set a precedent in opening India’s tightly-controlled automobile market to bilateral trade partners, potentially triggering similar demands in future FTAs.</p>.<p>“This is India’s first-ever auto tariff concession in any FTA, and is likely to trigger similar demands from Japan, the EU, South Korea, and the US,” said Global Trade Research Initiative (GTRI) founder Ajay Srivastava.</p>.<p>Meanwhile, for traditionally luxury imports like large-engine petrol cars above 3,000 cc and diesel cars over 2,500 cc, India has committed to lowering the current over-100 per cent customs duty to 10 per cent over 15 years, within a quota starting at 10,000 units and rising to 19,000 in year five.</p>.<p>For mid-sized cars (1,500-2,500 cc diesel/up to 3,000 cc petrol), a 50 per cent in-quota duty applies initially, falling to 10 per cent by Year Five. Small cars under 1,500 cc follow a similar tariff reduction path with a growing quota.</p>.<p>Meanwhile, out-of-quota imports would continue to face tariffs ranging from 95 per cent to 50 per cent, depending on vehicle size and year of make.</p>
<p>New Delhi: Auto, dairy, and agricultural products had been the sticky issues during 15 rounds of negotiations from January 2022 to this May that resulted in India and the <a href="https://www.deccanherald.com/tags/united-kingdom">UK</a> on Thursday signing the Comprehensive Economic and Trade Agreement (CETA), which seeks to boost trade by lowering tariffs.</p>.<p>Union Commerce and Industry Minister Piyush Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds inked the agreement in the presence of Prime Minister Narendra Modi and his British counterpart Keir Starmer in London on Thursday. </p>.<p>The implementation will take at least six to 12 months as it needs to be approved by the British parliament. No such approval is required in India.</p>.<p>Dairy and farm sectors are politically sensitive, as they impact the livelihood of a large number of people in India. The Modi government has not budged on this issue. Thus, India has not given any tariff concessions to the UK for the import of dairy, apples, and edible oils.</p>.<p>One of the most significant shifts in India’s foreign trade policy in this deal is related to the automobile sector.</p>.UK to import smartphones, optical fibre cables, inverters at zero duty from India under FTA.<p>India has agreed to cut duty on British cars to 10 per cent over five years from 110 per cent now. However, there will be several conditions.</p>.<p>No concessions have been given to electric, hybrid, and hydrogen-powered vehicles.</p>.<p>Moreover, there will be a quota. The number of Internal Combustion Engine (ICE) vehicles shall be reduced by the number of EV vehicles getting concessions from the sixth year to maintain the total quota volume of 37,000 units at the end of 15 years of duty concession, said official sources.</p>.<p>Analysts say the policy would set a precedent in opening India’s tightly-controlled automobile market to bilateral trade partners, potentially triggering similar demands in future FTAs.</p>.<p>“This is India’s first-ever auto tariff concession in any FTA, and is likely to trigger similar demands from Japan, the EU, South Korea, and the US,” said Global Trade Research Initiative (GTRI) founder Ajay Srivastava.</p>.<p>Meanwhile, for traditionally luxury imports like large-engine petrol cars above 3,000 cc and diesel cars over 2,500 cc, India has committed to lowering the current over-100 per cent customs duty to 10 per cent over 15 years, within a quota starting at 10,000 units and rising to 19,000 in year five.</p>.<p>For mid-sized cars (1,500-2,500 cc diesel/up to 3,000 cc petrol), a 50 per cent in-quota duty applies initially, falling to 10 per cent by Year Five. Small cars under 1,500 cc follow a similar tariff reduction path with a growing quota.</p>.<p>Meanwhile, out-of-quota imports would continue to face tariffs ranging from 95 per cent to 50 per cent, depending on vehicle size and year of make.</p>