India-UK Free Trade Agreement: Boon or Bane for Domestic Industries?

Prime Minister Narendra Modi's impending signing of an India-UK free trade agreement has stirred significant debate over its potential impacts on India's domestic industry. The Congress party has raised alarms about the agreement's implications for micro, small, and medium enterprises (MSMEs), as well as the pharmaceutical and automobile sectors. Criticism centers on how the agreement could advantage UK firms while potentially harming important sectors of India's economy.

Congress general secretary Jairam Ramesh has pointed out that the free trade agreement could have dire consequences, particularly due to its provision allowing British firms access to a massive market of around USD 600 billion in central government procurement. Ramesh also criticized the government's decision to reduce car import duties, predicting this could undermine local manufacturing and set a precedent for similar agreements with other nations.

Additionally, there are concerns about India's concessions in patent rules beyond WTO standards and the absence of a carbon tax exemption, which could negatively impact Indian industries. Despite these opposition concerns, Prime Minister Modi continues to emphasize the strategic partnership between India and the UK through enhanced economic collaboration aimed at fostering growth and job creation.

(With inputs from agencies.)