The UK and India have agreed a “landmark” trade deal worth £4.8 billion to the British economy.
Under the newly agreed UK-India Free Trade Agreement, barriers to trading will be dropped, with India agreeing to reduce tariffs on a series of products — including whisky, cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits.
The government has described the agreement as the biggest and most economically significant bilateral trade deal the UK has done since leaving the EU.
Keir Starmer says the deal will help the government “deliver a stronger and more secure economy”.
According to Department for Business and Trade (DBT) figures, based on 2022 trade alone, the deal will see India cut tariffs worth over £400 million when it comes into force, which will more than double to around £900 million after 10 years.
Whisky and gin tariffs will be halved from 150 per cent to 75 per cent before reducing to 40 per cent by year ten of the deal — while automotive tariffs will go from over 100 per cent to 10 per cent under a quota.
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As a result of the deal, the government says British shoppers could see cheaper prices and more choice on products including clothes, footwear, and food products including frozen prawns.
The deal is expected to increase bilateral trade by £25.5 billion, UK GDP by £4.8 billion and wages by £2.2 billion each year in the long run.
UK business and trade secretary Jonathan Reynolds and Indian commerce minister Piyush Goyal held final talks in London last week after relaunching negotiations two months ago.
Commenting on the new deal, Starmer said: “We are now in a new era for trade and the economy. That means going further and faster to strengthen the UK’s economy, putting more money in working people’s pockets.
“Through this government’s stable and pragmatic leadership, the UK has become an attractive place to do business. Today we have agreed a landmark deal with India — one of the fastest growing economies in the world, which will grow the economy and deliver for British people and business.
“Strengthening our alliances and reducing trade barriers with economies around the world is part of our plan for change to deliver a stronger and more secure economy here at home.”
Jonathan Reynolds said: “This government’s number one mission is growing the economy as part of our plan for change so we can put more money in people’s pockets.
“By striking a new trade deal with the fastest-growing economy in the world, we are delivering billions for the UK economy and wages every year and unlocking growth in every corner of the country, from advanced manufacturing in the North East to whisky distilleries in Scotland.
“In times of global uncertainty, a pragmatic approach to global trade that provides businesses and consumers with stability is more important than ever.”
Mark Kent, chief executive of the Scotch Whisky Association, has welcomed the “transformational” deal.
He said: “The UK-India free trade agreement is a once in a generation deal and a landmark moment for Scotch Whisky exports to the world’s largest whisky market.”
He added: “The reduction of the current 150% tariff on Scotch Whisky will be transformational for the industry, and has the potential to increase Scotch Whisky exports to India by £1bn over the next 5 years, creating 1,200 jobs across the UK.
“It will also give discerning consumers in India far greater choice of brands, as more SME Scotch Whisky producers have the opportunity to enter the market.”
Josh Self is Editor of Politics.co.uk, follow him on Bluesky here.
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