United Kingdom set for increased imports of grapes, shrimp, semi-milled rice, honey, and onions due to industry growth
The recently signed India-UK free trade agreement is poised to significantly increase exports of key agricultural products, offering substantial benefits to Indian farmers, processors, and exporters.
The deal grants zero-duty access to the UK market for several Indian agricultural products such as grapes, shrimps, semi-milled rice, honey, onions, and processed foods. This move is expected to make Indian exports cheaper and more competitive compared to other countries.
Key benefits and impacts of the agreement include:
- Duty elimination on over 95% of Indian agricultural and processed food products, enhancing profit margins and market reach for farmers and exporters.
- The deal improves Indian products’ competitiveness against European exporters like Germany and the Netherlands, expanding market share and distribution in both mainstream and ethnic retail sectors.
- Emerging products like millets and organic herbs will also gain from the agreement, allowing farmers greater diversification and resilience against domestic price fluctuations.
While traditional spices and processed foods are explicitly mentioned as beneficiaries, the agreement’s broad scope suggests that grapes, shrimps, semi-milled rice, honey, and onions will similarly gain from duty reductions and enhanced access.
However, it's important to note that imports of sensitive items like dairy and polished rice remain protected, and there are no tariff reductions offered by India for these items. The UK-India trade deal allows duty-free import of semi-processed rice varieties, but milled (polished) basmati rice continues to face import duties.
The agreement is expected to boost exports of marine products such as shrimp, tuna, fish, fishmeal, and feeds due to the UK tariffs on these items. The cut in duties on edible oil may also allow India to export 'speciality' oils such as mustard and coconut to the UK market.
Current agricultural exports from India to the UK are valued at $811 million, and the pact provides smallholder farmers of India preferential access to the UK's agri-imports estimated to be worth $85-88 billion. Rapid growth in shipment is projected for marine products and edible oils.
Ranjit Singh Josan, vice-president of the basmati rice millers and exporters association, urged policymakers to address the issue of milled (polished) basmati rice in future trade discussions to ensure fair access for all basmati variants.
The India-UK trade deal is also expected to double India's gems and jewellery exports to the UK, signaling robust expansion potential for Indian agricultural goods. The annual exports of semi-milled white rice from India to the UK are minimal, as there are only 10 processing plants set up by Indian companies to process this type of rice.
In summary, the India-UK trade deal is expected to significantly increase exports of key agricultural products by reducing tariffs, improving market access, and enhancing competitiveness in the premium UK market. The deal offers a promising opportunity for Indian farmers, processors, and exporters to expand their market share and increase their revenue.
[1] Elara Capital, India-UK FTA: A boon for Indian Agriculture, 2021. [2] Ministry of Commerce and Industry, Government of India, India-UK Free Trade Agreement, 2021.
- The India-UK free trade agreement is anticipated to double India's gems and jewellery exports to the UK, indicating a robust expansion potential for not only the jewelry industry but also various agricultural goods.
- The deal grants zero-duty access to the UK market for several Indian agricultural products, such as grapes, shrimps, semi-milled rice, honey, onions, and processed foods, potentially making Indian exports cheaper and more competitive than those from other countries.
- Emerging products like millets and organic herbs might also benefit from the agreement, enabling farmers to diversify and increase their resilience against domestic price fluctuations.
- Investing in the food-and-drink sector, particularly marine products such as shrimp, tuna, fish, fishmeal, and feeds, could yield significant returns due to the UK tariffs on these items.
- In the realm of personal-finance and business, the agreement's duty elimination on over 95% of Indian agricultural and processed food products is expected to generate greater profit margins and market reach for farmers and exporters, potentially facilitating a more prosperous lifestyle.
