The recently concluded Free Trade Agreement (FTA) between the United Kingdom and India is poised to give the UK a "genuine" competitive edge in the manufacturing sector, as highlighted during a debate in the House of Commons this week. UK Business and Trade Secretary Jonathan Reynolds addressed questions regarding the benefits of the agreement, which is projected to boost bilateral trade by £25.5 billion annually in the long term.

Reynolds emphasized that the FTA represents a significant economic victory for the UK, calling it the "best deal that India has ever offered." He specifically pointed to advanced manufacturing, noting that the agreement establishes advantageous positions for the UK, particularly in sectors like automotive and machinery. This sentiment was echoed in response to a question from British Sikh Labour MP Gurinder Singh Josan.

The agreement's potential impact extends beyond manufacturing. Scotland is expected to see considerable benefits, with projections estimating a £4.8 billion boost to the UK economy and a £25 billion increase in trade with India annually. The Scotch Whisky Association anticipates an additional £1 billion in exports and the creation of 1,200 new jobs. Furthermore, the FTA eliminates India's 33% tariffs on UK soft drinks, which should benefit companies like Irn-Bru.

British Airways is also planning to expand its routes and flight frequencies to India, aiming to capitalize on cargo opportunities arising from the FTA. Currently, the airline operates 56 flights weekly from five Indian cities and intends to further increase its presence in the Indian market. Sean Doyle, Chairman and CEO of British Airways, has identified India as a "very, very important" market for the company.

While the FTA is broadly welcomed, some points of discussion remain. For instance, while the UK has made extensive tariff concessions to America in a recent trade deal, the US has offered fewer concessions in return. Experts suggest that India may face increasing pressure from the US to finalize a mini-deal focused on tariff cuts and strategic commitments, potentially preceding a full FTA. Additionally, India has included safeguards in the agreement to protect its sensitive sectors, with import duties on automobiles being reduced over a period of 10-15 years. Duty concessions on petrol and diesel engine vehicles from the UK are also subject to pre-defined quotas.

Despite these considerations, the India-UK FTA is viewed as a positive step overall. Industry leaders from companies like Mercedes-Benz and BMW have acknowledged the agreement's positive implications, even while noting that it may not significantly impact the prices of luxury cars in the country. The agreement aims to double two-way commerce by 2030 from the current USD 60 billion. The recent FTA is expected to have far-reaching effects on various sectors and contribute significantly to the economic growth of both nations.