Why the trading deal in India and UK does not facilitate the US and India agreement

Hello, it’s Ganesh Rao, Senior CNBC correspondent who writes from London. This week I consider the readiness and restriction of India to conclude trade deals after I sat down with the secretary of the country’s trade PUSH Goyala. Enjoy!

This report will include a newsletter “Inside India” this week, which brings you timely, insightful news and comments to the market to the new power plant and large enterprises behind its meteorous lift. How is what you see? You can subscribe Here.

A great story

Just a week after India provided a landmark free trade agreement with the United Kingdom, US President Donald Trump said on Wednesday that in the South -Asian country, starting on August 1, 25% of tariffs were clapping.

Having angry between the defense of favorable conditions in transactions with the UK and negotiations for additional concessions from the US, the Indian government still replied cautiously, saying that “studying its consequences.

Trump’s move also means a sharp lapel from the optimistic tone of recent negotiations with the White House.

When I met with the Minister of Indian Trade Piyush Goyala just last week he told me this Negotiations were “progressed extremely well” And that he is convinced that India will provide “the preferred tariff compared to our peers and our competitors.”

Plan with Britain

However, Washington is a world that is in the world from a positive mood related to the comprehensive economic and trade agreement concluded in the UK earlier this month.

Is forecast for a deal Increase GDP UK by £ 4.8 billion annually According to the UK government, it will increase the bilateral trade by £ 25.5 billion.

According to Deutsche Bank economists, it can also add additional revenues to 2.5 billion pounds.

Tariff on Scottish whiskey, large exports in the UK, will be reduced Stunning 150% to 75% On the first day of the agreement and will be stopped up to 40% over the next decade. Similarly, UK car tariffs, which can reach 110%, will decline to 10% within the new quota system.

The transaction is mutual, that is, the UK eliminates the tariffs of 99% of all Indian goods, which currently about 73%, making an effective tariff rate for Indian exporters close to zero, the team led by Sajid Chana, the chief economist of India.

“I believe Wns. “This is a proper strategic partnership for the future.”

Some Trena is stored

Despite the comprehensive nature of the agreement, the final transaction does not include exemption from India from carbon tax in the UK, which is due in 2027.

Goyal said India would oppose any such measures he characterized as “non -tariff barriers”.

“India will continue to study every variant that we are available to us within the World Trade Organization to stop such measures from trading between the countries,” Goyal said. “We deserve the right to take appropriate actions in accordance with international law.”

Both countries have also not reached an agreement on a new investment agreement within the framework of the trade transaction.

India came out of the previous investment agreement with the UK and several other countries in 2017.

Goyal downgraded the value of his absence, believing that direct foreign investment in India “grew only by jumping and borders”, despite the lack of such investor protection.

The main thing is that India also did not allow access to the tariffs for the diary and the UK’s agricultural products.

Almost half of India’s population is involved in agriculture, and the government views them as a sensitive voting unit.

“We are always very sensitive to the interests of our farmers, our interests (micro, small and medium -sized enterprises) and will ensure that our problems are well protected,” Goyal said.

Here it seems that India’s readiness to open its markets has reached its borders when US President Donald Trump is Messages about the truth socially Specify.

India is challenged by the complexity of the principle of the world trade organization “the most supportive nation”. The MFN contract requires that any tariff decline offered by one country in bilateral talks must be extended to all other WTO members.

If India would give us the requirements for lower tariffs for sensitive products as agriculture, it will probably be obliged to offer these conditions to competitors as the UK and the European Union, which might cause a broader, albeit unintended, multilateral liberalization of trade.

The result of negotiations with the United States will be a decisive test for Indian officials.

“I think people trust India. People like to work in India. India is where the action. India is the most fast-paced great economy in the world today,” Goyal added.

So far, the action is focused on obtaining a transaction along the line with the United States.

Top Election TV on CNBC

Sakshi Gupto, Chief Economist of HDFC Bank, said that while public expenses and support for infrastructure and capital goods remain strong, the growth of consumption in India is lagging behind.

Bharti, head of the Indian capital markets in JPMorgan, said the IPO raise is usually taken by “break” when there is extraordinary volatility in the secondary markets.

Anubhuti Sahay, Head of the Indian Economics Research Department at a standard diplomatic bank, said India could absorb the cost of transition from Russian to crude oil when the sanctions fall.

Need to know

US President Donald Trump announces 25% of tariffs for India. In addition to this charge, India will also have to pay ‘fine“For his trade policy, which Trump is perceived as unfair and for the purchase of military equipment and energy in Russia, the president said on Wednesday.

India is superior to China on Smartphone Exports in the US According to the CANALYS research firm, 44% of US smartphones imported in the second quarter were assembled in Indiahigher than 25% of China.

Chinese citizens can get Indian visas again. New Delhi resumed Issuing tourist visas to Chinese citizens July 24. This notes de -escalation tensions between the two countries that traded blows in June 2020 According to Reuters, over their controversial Himalayan border.

– Yeo Boon Ping

In the markets

Indian stocks lost this month Nifty 50 The index decreased by 3% per month. The index increased by 4.7%this year.

A 10-year government bond with a 10-year Indian bond has increased slightly to 6.35%, as a result of last week.

Applicable

August 1: Producer Jewelry Shanti Gold International IPO, HSBC Manufacturing PMI in July

August 5.

August 6: India Reserve Bank Action Beta, Pre -Engineering M&B Engineering, Real Estate Company Sri Lotus Developers and Realty, as well as Depository National Securities Deposit IPOS IPOS

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