India-Britain Free Trade Agreement (FTA)

The recently concluded India-Britain FTA marks a significant milestone for both nations, offering potential benefits and strategic advantages.

Key Highlights

• Post-Brexit Significance for Britain: This FTA represents Britain's most substantial trade agreement since Brexit.
• India's Broad Engagement: It is India's broadest agreement with a developed economy, serving as a potential model for ongoing negotiations with the US and the EU.
• Comprehensive Coverage: While the pact is extensive, it does not cover a comprehensive trade and investment treaty regarding taxation and dispute resolution.
• Carbon Border Adjustment Mechanism (CBAM): A workaround has been devised for Britain's CBAM, which is critical for future negotiations with the EU.

Strategic Implications

• Influence on US Talks: India's concerns over farm output protection and social security for its migrant workforce will impact US negotiations.
• Opportunity Amidst Global Decoupling: The FTA is strategically timed with the US-China economic decoupling, offering India a chance to emerge in manufacturing exports.

India's Trade Advantages

• Consumption-Led Growth: India's economy stands out due to its consumption-driven growth, unlike its Asian peers that are export-led.
• Demographic Advantage: India leverages its demographic benefits to pursue globalization in a deglobalizing world.