The post-Brexit deal between the UK and the EU may not result in direct gains for Indian exporters in terms of increased market access for goods but demand for services could increase in the UK, say experts.

Exporters of goods from India may also be spared additional pain, as they will not have to go through the trouble of adhering to two sets of standards and technical specifications since the UK and the EU are expected to continue with common norms.

“In the goods sector, there will be no change as the EU and the UK are not imposing tariffs on each other which could have resulted in higher market access for others. It is a balanced position for Indian exporters as there is status quo,” said Ajay Sahai, Director General, Federation of Indian Export Organisations (FIEO).

Competition for Indian exporters in the UK from countries that had special agreements with the EU will remain the same too as the UK will continue to offer them the same concessions as the bloc because of the deal, Sahai added.

The UK. and the EU recently secured an agreement over the terms of their future relations following Britain’s decision to exit the bloc. The deal reached just days ahead of the December 31 deadline for completion of the transition period saved the UK the uncertainty and pain attached to exiting the bloc and being treated as just any other foreign trading partner.

The services edge

While the gains on the goods front for India from the arrangement may be minimal, there could be substantial benefits in the area of services going forward, said Biswajit Dhar, Professor, Jawaharlal Nehru University (JNU).

As the UK may need to get into separate mutual recognition agreements with all the individual EU states in the area of services, professionals from India in different areas of services may stand to gain, he said.

The advantage for English-speaking Indian professionals may be in areas such as IT, R&D, financial services and services like architecture and engineering.

As two-way trade in services between the UK and the EU is around $200 billion put together, India stands to make substantial gains, Sahai said.

Brexit and the EU-UK deal may also help India get into a more lucrative free trade agreement with the UK as the country may be less stringent in terms of its demands in areas such as agriculture, labour and environment, Dhar added.

One definite gain from the deal between the EU and the UK is that Indian exporters can target both the markets with the same standards and specifications. “Indian exporters will not have to tailor-make their products for the EU and the UK separately, which would have been painful,” said Sahai.

The EU is one of India’s largest export destinations with exports worth $53.5 billion in 2019-20 (accounting for 17 per cent share in total exports), while UK was the top market amongst the EU countries for India accounting for $8.76 billion of exports during the year.