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Source– The post is based on the article “What unites India and the UK on trade isn’t all positive” published in Live Mint on 15th September 2022.
Syllabus: GS2- International Relations.
Relevance– About trade.
News- The article explains the economic challenges faced by Britain and similarity with India on the trade front.
What are the challenges faced by Britain?
Britain is facing economic questions like peak inflation rate, high energy bills, higher interest rates.
On political fronts there are increasing calls for a referendum in Scotland. A bill is about to pass in Parliament that seeks to make unilateral arrangements on goods moving between Britain and Northern Ireland, instead of negotiating these disagreements with the EU.
The new PM Truss commitment to cancel a corporate tax hike that would take effect from April 2023. This will impact the fiscal revenue.
The UK had been steadily losing ground to its European partners in terms of both productivity increases and income growth.
According to The Resolution Foundation, the UK performed worse than most European countries from 2007 to 2018 on household spendings with only households in Greece and Cyprus seeing less growth. Incomes rose by 34 percent in France and 27 percent in Germany Compared to the UK.
What is the similarity between India and the UK?
Britain has exited the biggest trade union. India also opted out from RCEP and is seeking clarification before it joins the Indo-Pacific Economic Framework.
The UK has fallen behind most of Europe. India is also lagging behind East Asia in per capita income and human development metrics.
Both the UK and India are led by bureaucrats and politicians with a weak understanding of regional supply chains and how essential they are to boosting exports.
