Kolkata: India registered an export of goods worth $140 million or about Rs 1,344 crore at current exchange rates to the UK at zero duty on July 15, the first day of the CET (Comprehensive Economic and Trade Agreement), popularly referred to as FTA or Free Trade Agreement. Union commerce secretary Rajesh Agrawal revealed this piece of data and said the agreement is a crucial piece of document which was finalised after conducting more than 800 technical sessions over 14 formal rounds of negotiations. The FTA allows duty-free access to nearly 99% of Indian exports from labour-intensive sectors such as leather, footwear, textiles, mechanical and electrical machinery, plastic, base metals, marine products and gems and jewellery. The trade pact could boost bilateral trade by more than 25 billion pounds annually over the long term and contribute about 5 billion pounds annually to the GDP of both the UK and India, said British High Commissioner to India Lindy Cameron.
Under the India-UK FTA, goods packed in more than 50 consignments were sent via more than 20 ports, airports, Inland Container Depots (ICDs), SEZs (Special Economic Zones) and factories across India. The products sent included a wide array of items such as electronics, pharmaceuticals and gems and jewellery. Some of the ports involved were Mundra, Nhava Sheva and Chennai. Some were dispatched through airports in Mumbai (Sahar), Kolkata and Hyderabad.
The FTA incorporates provisions for Indian suppliers getting legal access to the procurement market of the UK government which could be valued around 90 billion pounds or $122 billion. As a reciprocal gesture, India has offered opportunities to British to the Indian government procurement sector to the tune of $114 billion. The agreement has said firms meeting a 20% UK-content threshold can be treated as Class 2 suppliers. The additional secretary in the Department of Commerce Darpan Jain has mentioned that there are said that they have put safeguards to protect interests of Indian MSMEs. “India reserves the right to grant preferential treatment to its MSMEs as per its policy. So that is not affected,” he said. A point to note is that state governments cannot exercise the government procurement commitments and can be exercised only by the Centre. And it will not be applicable in all departments and PSUs.
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Avijit Ghosal has been writing on topics of business, industry and investment for the past three decades. He also writes on the broad economy, infrastructure and issues in banking. He has worked for economic dailies such as the Business Standard, The Economic Times, business magazines such as Business Today, English broadsheet the Hindustan Times and Bengali daily Anandabazar Patrika before joining TV9 Network.