Britain and India on 6 May concluded a ‘landmark’ free trade agreement, which the UK government said would eventually add £4.8bn to the British economy – aided by substantial reductions in Indian tariffs on whisky and car exports from the UK, Financial Times reported.
Negotiations, ongoing for three years, gained momentum following last month’s introduction of global tariffs by US President Donald Trump, prompting both London and New Delhi to push for deeper trade engagement.
‘In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement,’ Indian Prime Minister Narendra Modi shared the announcement on X following a call with his UK counterpart, Sir Keir Starmer.
He added that the agreement ‘would help catalyse trade, investment, growth, job creation and innovation in both our economies,’ and noted that Starmer was expected to visit India in the near future.
British ministers view the deal with India as a potential precursor to an agreement with President Trump in the coming days, and as a step towards enhancing trade relations with the EU at a summit scheduled for 19 May.
While the UK secured tariff reductions on key exports to India – including whisky, gin and cars – New Delhi sought improved access for its skilled professionals in the IT sector, alongside lower duties on textile exports.
Under the terms of the agreement, tariffs on whisky and gin will be cut in half – from 150% to 75% – and reduced further to 40% by the tenth year. Duties on car exports will drop from over 100% to 10%, though subject to a quota system.
According to the UK government, reduced tariffs on Indian imports will lead to ‘cheaper prices and more choice’ for British consumers across a range of goods, including clothing, footwear, and food items such as prawns.
Although full details have yet to be released, the agreement is expected to rank among the most significant trade deals Britain has concluded since leaving the EU – following earlier accords with Australia and Japan.
It is also likely to stand as one of the most important deals signed by India under Prime Minister Modi’s leadership, alongside free trade agreements secured over the past decade with the United Arab Emirates, Australia and the European Free Trade Association.
