UK and India agree trade deal
CliffNotes
- UK and India agree trade deal after more than 3 years of talks
- It will be easier for the UK to export whisky, cars and other products to India
- PM says deal will boost UK economy
UK and India agree trade deal
What Happened
UK and India agree trade deal after more than 3 years of talks. The UK-India trade deal will make it easier for UK firms to export whisky, cars and other products to India, and cut taxes on India’s clothing and footwear exports.
PM Keir Starmer says the deal would boost the UK economy and “deliver for British people and business” whilst also reporting the landmark agreement did not include changes to any immigration policy.
What does the deal include?
Lower tariffs on
- Clothing and footwear
- Cars
- Foodstuff products including frozen prawns
- Jewellery and gems
The UK government also emphasised the benefit to the UK economy and job creation from UK firms expanding exports to India.
UK exports that will see levies fall include:
- Gin and whisky
- Aerospace, electricals and medical devices
- Cosmetics
- Lamb, salmon, chocolates and biscuits
- Higher value cars
Indian reaction to trade deal
India’s PM Narendra Modi called the deal a “historic milestone” that was “ambitious and mutually beneficial.”
The pact would help “catalyse trade, investment, growth, job creation, and innovation in both our economies”, he said in a post on social media platform X.
What Comes Next
Once it comes into force, which could take up to a year, UK consumers are likely to benefit from the reduction in tariffs on goods coming into the country from India.
Last year, trade between the UK and India totalled £42.6bn and was already forecast to grow, but the government said the deal would boost that trade by an additional £25.5bn a year by 2040.
India is the world’s fifth-largest economy and is expected to become the third-largest within a few years, making it a desirable trading partner for the UK – currently the world’s sixth-largest economy.
The UK is also a high-priority partner for India, which has an ambitious target to increase exports by $1 trillion by 2030.
Reactions From The Media
- The Daily Telegraph leads with the Tory criticism of the deal – which exempts Indian workers in the UK from paying National Insurance for three years. The paper says it amounts to a “two-tier tax deal” and quotes Nigel Farage as saying the agreement “betrays working Britain.”
- The Daily Mail says the deal will make it cheaper to employ foreign workers and Dehli has heralded it as an “unprecedented win.”
- The Times says the agreement is worth up to £5bn for the British economy but also undercuts UK workers. It says ministers have pointed to similar deals the UK already has with the US and Europe and that it would also benefit British workers in India.
- Indian Express says Modi said he was delighted to speak to “friend PM Kier Starmer” whilst reporting the deal will ‘significantly enhance commerce, generate new job avenues’.
- CNBC says the growing protectionism of the US may “ironically” help other countries forge closer economic ties as seen with the UK-India deal. The paper notes that ASEAN and China are to meet later in the month to negotiate improvements on a free-trade deal.
