Unlocking the potential for future India-UK trade and development

该项目旨在了解哪些因素刺激或阻碍了英国和印度之间的经济关系。两国都是对方出口商和投资者的重要市场，必须充分释放英印伙伴关系的潜力。这不仅将使英国公司在印度表现更好，而且重要的是，这可能会对印度的发展结果产生至关重要的影响。首先，我们将详细评估目前管理印度和英国之间贸易的制度，即欧盟的普遍优惠制(GSP)的优缺点。普惠制允许印度出口商以比与世界贸易组织达成的协议更优惠的条件(即更低的进口关税)与欧盟(和英国)进行贸易。然而，普惠制是一个不完美的制度，因为它在选定的部门给予这种更优惠的待遇，而且是暂时的。此外，对具有国际竞争力的国家和部门取消这种待遇。我们的贡献是首次详细分析企业如何应对普惠制带来的挑战，特别是取消优惠待遇的事件，在印度-英国的案例中，取消优惠待遇提高了适用于印度进口到英国的关税。我们将研究公司如何调整他们的贸易活动(对于印度公司，进入和退出出口；对于英国公司，调整哪些产品是从印度进口的)，公司的生产率如何对普惠制的变化做出反应(预计印度公司将变得更有生产力以继续向英国销售；英国公司预计将变得更低，因为他们面临来自印度的竞争)，印度公司雇用的劳动力变得更熟练还是更不熟练(生产率的提高可能需要更多熟练劳动力)。这一分析将使决策者了解如何在短期内应对普惠制带来的挑战。接下来，我们将评估未来英印关系的长期选择，并为此评估英国和印度加入自由贸易协定(FTA)的影响。自贸协定将允许两个经济体比普惠制下的经济体更深入地融合，它将确保与投资者和贸易商建立长期稳定的关系，并将降低彼此之间的贸易成本(印度和英国的进口关税都将降低)。我们将模拟英印自贸协定对制造业和服务业的影响：鉴于服务业对两国经济的相关性，对服务业的分析尤其将为英国和印度的政策制定者提供重要的见解。我们将使用我们创建的最先进的模型，我们将评估自贸协定对产出、贸易和价格的影响。我们将考虑几种自由化情景，其特征是印度和英国之间关税和非关税壁垒的取消或更大或更小，我们将评估英国-印度自贸协定在各种英国退欧情景下的影响。我们将进行的第三部分分析致力于审查项目前两部分审查的政策变化的发展成果(取消普惠制贸易优惠和从普惠制转向自贸区)。我们将评估这些政策变化带来的贸易变化如何反映在就业变化中，以及就业变化反过来如何影响印度家庭的收入和支出(从而影响贫困率)。我们将使用详细的印度家庭水平数据进行这一分析。最后，我们将调查印度政策制定者和企业对该项目中研究和提出的政策变化的可能反应和看法。我们将通过提交问题清单来收集他们的意见信息，并将评估加强英印关系所需的政策变化实施的可能性

This project aims at understanding which factors stimulate or hamper economic relations between the UK and India. Both countries are important markets for each other's exporters and investors, and it is imperative to unlock the full potential of the UK-India partnership. This will not only allow UK firms to perform better in India but, importantly, there can be crucial repercussions on development outcomes in India.First, we will assess in detail the strengths and weaknesses of the system currently governing trade between India and the UK, i.e. the Generalised System of Preferences (GSP) of the EU. The GSP allows Indian exporters to trade with the EU (and the UK) on more favourable terms (i.e. lower import tariffs) than what established under the agreements with the World Trade Organisation. The GSP, however, is an imperfect system, because it grants this more favourable treatment in selected sectors and on a temporary basis. Further, the treatment is revoked from countries and sectors that become internationally competitive. Our contribution is to provide the first detailed analysis of how firms respond to the challenges created by the GSP, in particular to episodes of removal of the preferential treatment, which, in the India-UK case, increase the tariffs applied to Indian imports in the UK. We will study how firms adjust their trade activity (entry and exit from exporting, for Indian firms; adjustment of which products are imported from India, for UK firms), how firms' productivity responds to changes in the GSP (Indian firms are expected to become more productive to keep selling to the UK; UK firms are expected to become less productive as they face less competition from India), whether the labour force that Indian firms employ becomes more or less skilled (increased in productivity might require more skilled labour). This analysis will inform policy makers about how to address the challenges brought by the GSP system in the short term.Next, we will evaluate long term options for future UK-India relations, and for this we will assess the effects of the UK and India entering in a Free Trade Agreement (FTA). An FTA will allow the two economies to be more deeply integrated than in the GSP system, it will guarantee the certainty of a long and stable relation to investors and traders, and will reduce the costs to trade with each other (both Indian and UK import tariffs will be reduced). We will simulate the impact of the UK-India FTA for both manufacturing and services sectors: the analysis on services, in particular, will provide important insights for both UK and Indian policy makers, given the relevance of services for both economies. We will make use of a state-of-the-art model created by us and we will assess the impact of the FTA on output, trade and prices. We will take into account several liberalization scenarios, characterized by larger or smaller elimination of both tariff and non-tariff barriers to trade between India and the UK, and we will assess the impact of the UK-India FTA under various Brexit scenarios.The third part of the analysis we will undertake is dedicated at examining the development outcomes of the policy changes examined in the first two part of the project (GSP trade preferences removal and switch from the GSP to an FTA). We will evaluate how the changes in trade brought by these policy changes are reflected in changes in employment and how the latter, in turn, can affect Indian household's income and expenditure (hence poverty rates). We will use detailed Indian household level data for this analysis. Finally, we will investigate the likely reactions and sentiment of Indian policy makers and businesses to the policy changes examined and proposed in this project We will collect information on their views by submitting a list of questions and we will evaluate the likelihood of implementation of the policy changes that would be required to strengthen the UK-India relation