The British government described the deal as the “biggest and most economically significant” trade agreement the UK has signed since leaving the European Union in 2020.
Business leaders have today expressed strong approval of a historic trade deal between the UK and India, which has been finalised following three years of negotiations.
The new agreement will ease UK firms’ access to the Indian market, enabling smoother exports of products like whisky, cars, aerospace equipment, and medical devices. Additionally, India’s clothing and footwear exports will see tax reductions, offering further economic opportunities.
Other UK goods benefiting from lower tariffs include electrical products, cosmetics, lamb, salmon, chocolates, and biscuits.
Prime Minister Sir Keir Starmer hailed the deal, asserting that it would significantly boost the UK economy and “deliver for British people and business.”
Trade between the UK and India was valued at £42.6bn last year and was already expected to grow. However, the government projects that this new agreement could increase trade by an additional £25.5bn annually by 2040.
“With India being the world’s fastest-growing economy, this deal opens the door for further expansion”
–Raj Kandola
Raj Kandola, Director of External Affairs at Greater Birmingham Chambers of Commerce, commented on the significance of the deal: “This Free Trade Agreement (FTA) represents a major boost to both our economies and will be especially beneficial for the West Midlands.”
“India is a key source of investment for our region, with an estimated £3.5bn investment over the past decade, creating around 13,000 jobs. The agreement will provide substantial relief to exporters, with products ranging from Scotch whisky to clothing benefitting from reduced tariffs. This offers UK businesses a clear competitive edge in increasing sales to India,” he added.
Kandola highlighted the potential for future growth, stating, “With India being the world’s fastest-growing economy, this deal opens the door for further expansion. Coupled with our region’s strengths in services trade, particularly in business, travel, and transport services, this agreement offers promising prospects for future bilateral trade growth.”
The British government described the deal as the “biggest and most economically significant” trade agreement the UK has signed since leaving the European Union in 2020.
Notable provisions include a halving of tariffs on gin and whisky to 75%, with further reductions planned in the coming years. Tariffs on more expensive UK-made cars, which previously stood at 100%, will now be reduced to 10%, subject to a quota on total exports.
The agreement also covers the services sector and procurement, giving British firms greater access to Indian contracts. Additionally, some Indian and British workers will be exempt from social security payments for up to three years, allowing employees temporarily transferred between the two countries to contribute only to their home country’s social security system.
