The United Kingdom and India announced on Tuesday that they had reached an agreement on a free trade deal following three years of negotiations, as reported by Reuters. The British government anticipates that the deal will boost bilateral trade by £25.5 billion ($34 billion) annually in the long term.
Indian Prime Minister Narendra Modi described the agreement as ambitious and mutually beneficial in a post on social media platform X, while the UK government hailed it as a breakthrough. The deal will see India slash import duties on British goods, including whisky, cosmetics, medical products, automotive and aircraft components, among others. Tariffs on whisky and gin will be halved from 150% to 75%, with further reductions to 40% over the next decade. Meanwhile, duties on auto parts will drop from over 100% to just 10%.
Mark Kent, CEO of the Scotch Whisky Association, stated that the deal would be transformative for the industry, given India’s status as one of the world’s largest whisky markets. He projected that the lower tariffs could drive an additional £1 billion in Scotch whisky exports to India within five years.
Downing Street confirmed that Prime Minister Keir Starmer had accepted an invitation from Modi for an official visit to India, signalling continued diplomatic engagement.
Formal UK-India free trade talks began in 2022 under then-Prime Minister Boris Johnson, who framed the agreement as a key post-Brexit objective. The negotiations spanned 13 rounds before stalling in 2023 amid political transitions in both nations. India’s ruling Bharatiya Janata Party (BJP) secured another term in 2024, while the UK’s Labour Party ended 14 years of Conservative governance, with Starmer taking office.
The deal marks a strategic win for Britain as it seeks to strengthen economic ties outside the EU, though critics argue that concessions on agricultural and services sectors remain unresolved. India, meanwhile, gains improved access to British markets for its textiles and pharmaceuticals, reinforcing its position as a growing economic power.
