The UK and India reached the culmination of long negotiations as the new free trade agreement between the world’s 5th and 6th largest economies comes into effect. The agreement will deliver major benefits to exporters in both countries, estimated at an eventual £25bn boost in bilateral trade, by reducing or removing tariffs on almost all goods exports, writes Rashid Abdulla, DP World CEO & MD, Europe (pictured below).
“Some businesses will see sweeping reductions. The UK’s largest food and drink export, whisky, will benefit from a Indian tariff cut from 150% today to 40% over the next 10 years, while the tariff faced by UK car manufacturers’ on exports to India will fall below 10%. The majority of current UK exports to India will ultimately be tariff free. UK suppliers will also gain access to the Indian central government procurement market, worth tens of billions a year.
“For key Indian export sectors, like textiles and fishing, tariffs on the goods they send to the UK will also be cut, giving UK consumers more choice and cheaper prices on the high street. This is good news for people and businesses in both countries – trade powers economies. Reducing tariffs and freeing international trade boosts prosperity.
“Negotiating, signing and ratifying free trade agreements is the first step to boosting trade. Delivering on their potential requires reliable, resilient trade networks with capacity to spare. The logistics assets and networks that underpin the ability of economies to trade reliably and in increasing volumes are especially important when goods need to cover significant distances to reach their intended markets.
“The UK and India already trade goods and services worth £48bn a year. Boosting this trade requires innovative, ambitious businesses seeking to export to distant markets, served by the major freight handling and transport infrastructure they need to do so successfully. As a country grows the volume of its trade, so it needs more facilities, modes and routes to service that trade with the speed and reliability that cargo owners require.
“For small or medium sized enterprises, some who may be exporting into a new market for the first time, the prospect may seem daunting. However, the UK has the trade infrastructure in place, a developed network of routes, and the business expertise available to ensure the reduction of tariffs is an opportunity that is taken.
“DP World has now invested more than £6bn in our network of UK assets, as we believe in this country’s potential to continue growing as a global trading power. Our ports, logistics and marine services network is connecting UK importers and exporters with domestic and international markets.
“Enhanced trade capacity makes the UK better able to respond and adapt to trade shocks, elevates its role in connecting European trade more widely, and brings it closer to global markets. In India too DP World is a major investor that handles one quarter of the national container trade. We integrate ocean, air, road and rail transport in India with free zones, warehousing and forwarding to make trade simple and boost supply chain resilience. A container leaving the UK from London Gateway on one of the world’s largest container ships can reach our terminals in Nhava Sheva, Mundra, Chennai or Cochin in little more than three weeks. Our new container terminal at Tuna-Tekra in Gujarat is scheduled for completion next year.
“Supply chain resilience around the world is now in greater focus than perhaps ever before. When routes and networks are disrupted by global events and geopolitics, exporters need logistics expertise to adapt and ensure their goods reach the markets they are destined for, safely and on schedule.
“In a market as large and complex as India, inconsistent fulfilment can quickly erode distributor confidence and weaken customer relationships. Businesses that cannot maintain operational continuity may find themselves losing market share not because of product quality, but because of an inability to deliver reliably at scale.
“This is where integrated logistics and market access expertise become strategically important. Exporters need customs coordination, market access advisory and established operational infrastructure – regulatory expertise and end-to-end logistics execution help them reduce administrative friction, maintain supply chain visibility and secure resilient distribution networks.
India is forecast to become the world’s 3rd largest economy in the coming years.
“Increasing trade with India and with the world’s other major economies is a long-term opportunity for the UK. Investment that has been made already and is still ongoing can support the businesses who will generate rising exports and spread the benefits of growth to every part of the country.
“The start of a major free trade agreement is an exciting moment brimming with economic potential, and for businesses and employees across the UK we hope to see repeated many more times in the coming years.”
