India and the United Kingdom have signed a landmark Free trade agreement, called the Comprehensive Economic and Trade Agreement or CETA. The deal, which was announced in May after three years of talks, was signed in London in the presence of Prime Minister Narendra Modi and British PM Keir Starmer.
A win-win deal
For India, it’s a big trade deal, as it allows almost 99 per cent of Indian goods tariff-free entry into the UK. It will also make it easier for Indian professionals to work in Britain, with simplified visa norms. On the other hand, for the UK, it will reduce duties on import of goods such as cars, whisky, beauty products and chocolates to India.
US-Japan tariff deal
This week we also saw the United States signing an agreement with Japan. The deal comes ahead of the first August deadline for new Trump tariffs to kick in. Under the pact, the US will impose a 15% tax on imported Japanese goods, a significant relief from the previously proposed 25% rate. What makes the deal special is the lowering of tariff on auto exports as well to per cent, versus the sectoral cap fixed by the Trump administration at 25 per cent. Autos comprise nearly 30% of Japan's shipments to the US.
Announcing the agreement, US President Donald Trump also said Japan would invest 550 billion dollars in the US and “open” its economy to American automobiles and rice.
India’s economic ascent
A Morgan Stanley report has said India is set to become the world’s third-largest economy by 2028. The report further predicts the Indian economy will hit the $10 trillion mark by 2035.This surge to $10 trillion, the report adds, will be driven by at least three to five states hitting the trillion-dollar economy mark individually. These states could be Maharashtra, Tamil Nadu, Gujarat, Uttar Pradesh, and Karnataka.
According to the report, India is also likely to contribute 20% of global growth over the next decade. Which means it will also emerge as a key driver of earnings for multinational companies.
FAA Chief on Air India plane crash
Bryan Bedford, the Administrator of the US Federal Aviation Administration, has said the crash of the Boeing 787 jet, operated by Air India, last month was unlikely to have been caused by a mechanical issue with the plane. He has also ruled out any inadvertent movement of the aircraft’s fuel control switches.
According to a Reuters report, the FAA chief, while speaking to reporters in Wisconsin, US, said, “What we can say with a high level of confidence is it doesn’t appear to be a mechanical issue with the Boeing fuel control unit.”
Gita Gopinath quits IMF
Indian-American economist Gita Gopinath has decided to leave the IMF to rejoin the faculty at Harvard University. Gopinath joined the IMF in January 2019 as its Chief Economist, making history as the first woman to hold the post.
After three years in that role, she was promoted to First Deputy Managing Director in January 2022, becoming the Fund’s second-in-command.
Indian equities unchanged
Indian equities remained almost unchanged, giving up the gains from the first half of the week in the last two sessions. The Sensex closed below 82,000, a little lower than it was last Friday. The Nifty also slipped below 25,000 again, after reclaiming it earlier.
