The Free Trade Agreement (FTA) between India and the United Kingdom has paved the way for the country's small and medium enterprises (MSMEs) to gain a new identity in the global market. Following this agreement, Indian MSME products will not be subject to import duties in the UK, which will reduce prices and increase competitiveness.
Indian artisans and producers can now directly enter the labour-intensive UK market, worth approximately ₹1.9 lakh crore. Until now, this exemption was available to countries such as Bangladesh, Pakistan, and Cambodia, but India now has an equal opportunity.
Which products will benefit the most?
Under the FTA, several major categories of goods will directly benefit. These include:
- Leather and Footwear
- Textiles and Apparel
- Furniture
- Gems and Jewelry
- Sports Goods
India has a b presence in all these sectors, and MSMEs produce these goods on a large scale. With the tax exemption, these products will now be available at competitive prices in the UK market.
Major Relief for Cities Like Tirupur, Agra, Panipat
Several regional hubs in India, which have long been manufacturing traditional products, can now directly connect with the UK's retail and wholesale networks. Family weavers in Tirupur, home textile manufacturers in Panipat, the carpet industry in Bhadohi, and shoe manufacturers in Agra – all will now have access to UK customers without any additional taxes.
Duty-Free Access Gives MSMEs a Direct Global Competition
Following the FTA, Indian MSMEs have gained duty-free access to the UK. This means they will not have to pay any taxes on their products. This will not only reduce prices but also enhance quality and brand recognition.
Now, Indian producers can directly sell their goods to major UK brands, retail chains, and online platforms. This will give small businesses the opportunity to reach global customers.
Specific Benefits for MSMEs
According to the government and trade organizations, this FTA includes several special provisions for MSMEs, including:
- Export Finance and Training: Businesses will receive assistance in export financing, training, and finding trading partners.
- Simplified Logistics and Certification Process: The certification and technical barriers that existed earlier have now been simplified.
- Promotion of E-commerce: Trade will be promoted through digital channels, allowing MSMEs to reach customers without intermediaries.
- GI Tag and IP Protection: Special regional products will receive international recognition and protection.
- Entry into UK Tenders: Indian MSMEs will now have the opportunity to participate in the UK's government tender process.
Leather and Footwear Exports to See a Boost
The FTA will directly impact India's leather and footwear exports. It is estimated that this sector alone can export more than $900 million to the UK. This will particularly benefit hubs like Chennai, Kanpur, Agra, and Kolhapur.
In these cities, the shoe and leather industry largely operates under MSMEs, employing thousands of women artisans and traditional craftsmen. They will now have equal opportunities in the international market.
Textile Industry to Receive an International Boost
India's textile and apparel industry is the largest employer in the MSME sector. With the removal of taxes in the UK, Indian products such as T-shirts, kurtas, dupattas, and home textiles will be available at competitive prices.
Until now, countries like Bangladesh and Vietnam were ahead in this regard, but now India will also be able to enter this race bly.
Other Sectors Where the Impact Will Be Visible
The impact of the FTA will not be limited to traditional products. Several new sectors will also benefit from it, such as:
- Pharmaceutical and Medical Devices
- Marine and Food Processing
- Electronics and Engineering Products
- Alcoholic Drinks and Packaged Foods
- Oilseeds and Plantation-related Products
MSMEs' participation in all these sectors will increase, and they will gain direct access to the UK market.
Path Opened for Digital and Sustainable Manufacturing
The FTA emphasizes the promotion of digital trade and green manufacturing. Under this, MSMEs will be helped to directly reach international customers with their products through e-commerce platforms.
In addition, priority will be given to businesses that adopt environmentally friendly production processes.
