Indian PM Narendra Modi and UK PM Keir Starmer signed the much-awaited and historical agreement in London that cut tariffs on goods from textiles to whiskey and cars. This marks the country’s first major Free Trade Agreement in over a decade and the UK’s fourth since its exit from the EU.
Both nations finished the trade pact after three years of negotiations, tackling issues like visas, tariff reduction, and tax breaks. The deal gained notable momentum, and both countries actively signed it despite US President Donald Trump’s tariff threats.
The agreement aims to boost the bilateral trade to 25.5 billion pounds by 2040. This is going to be the biggest trade deal of the UK after it left the EU, but it will have a fraction of the effect of leaving the orbit of its closest trading partner.
The Key Benefits of the India-UK Deal
This FTA is expected to offer various economic-related benefits apart from the market access. The purpose of this deal is to promote professional mobility, strengthen regulatory cooperation, and accelerate cross-border investment. India is aiming to increase its exports and growth in the major sector, while the UK is focusing on its entry into one of the fastest-growing consumer markets.
Under the trade agreement:
- Tariffs on Scotch whisky will drop to 75% from 150% and slide to 40% over the next decade, and tariffs on brandy and rum will be reduced to 110% initially and then 75%.
- On cars, India will cut duties to 10% in the next five years.
- Indian manufacturers will be able to access the British market for electric and hybrid vehicles.
- 99% Indian exports to Britain will benefit from zero duties in textiles
This trade agreement is going to strengthen both nations. It will boost the British economy by a further 4.8 billion pounds each year, and for India, it will serve as a springboard for the country’s talks with other nations and push its position as a viable trading partner.
