Analysing the Impact of India’s Tariffs on UK-India Trade

The Project at A Glance

The UK and India enjoy a strong bilateral trade and investment relationship. Nevertheless, this relationship is not reflected in trade: bilateral trade between the UK and India has not kept up, with the UK losing significant market share over the last twenty years.

International Economics (IEC), with funding from Foreign and Commonwealth Office, conducted a study to provide a full picture of the economic impact to both India and the UK of the existing Indian tariff structure as the UK considered starting negotiations over a possible Free Trade Agreement (FTA) with India.

What We Found

The project’s overall objective was to provide empirical evidence to support the ongoing UK-India trade discussions by providing detailed statistical analysis and assessment of the existing Indian basic customs duty structure and the economic impact to both India and the UK of any reductions in these duties. The team also provided analysis of the respective sectors of the UK and Indian economies, and specific products, that would most benefit from any tariff reduction and case studies of the impacts of such reductions.

Our Strategy and Impact

International Economics used a mix of quantitative and qualitative tools to conduct the study. The quantitative questions of the negotiations were disentangled using a Computable General Equilibrium Model and a Partial Equilibrium Model. The qualitative element of this project identified areas where policy bottlenecks can be found – such as in addressing non-tariff barriers (NTBs), government procurement, approach towards state-owned enterprises, amongst others. The final report was used by the UK’s Department of International Trade to formulate its strategy on the trade relationship with India.

Our Core Solutions

Governments, international donors, and the private sector face many important questions on the expected outputs and impact before, during and after the implementation of their projects. This is where International Economics Consulting’s team of experts, using innovative methodologies to collect and analyse data, can assist you in tracking the economic, social, and environmental aspects of your project.

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