UK, India strike trade deal amid Trump’s tariff wars
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The news: The UK and India have agreed to a landmark free trade deal that will see the world's fifth and sixth largest economies strengthen their ties against the backdrop of trade tariff uncertainty sparked by US President Donald Trump.
The numbers: The deal aims to increase bilateral trade by a further £25.5 billion ($52.8 billion) by 2040 with liberal market access and eased trade restrictions. The UK Department for Business and Trade said that the deal will also increase UK GDP by £4.8 billion and wages by £2.2 billion each year in the long run.
Under the agreement, India will slash levies on a number of British products sold in the country, including whisky, medical devices, machinery and food products. Indian tariffs will be slashed, locking in reductions on 90% of tariff lines, with 85% of these becoming fully tariff-free within a decade.
Whisky and gin tariffs will be halved from 150% to 75% before reducing to 40% by year ten of the deal, while automotive tariffs will go from over 100% to 10% under a quota.
The context: The deal has been concluded after three years negotiations, and UK Prime Minister Keir Starmer described the agreement as the biggest the UK has done since leaving the EU, and the most ambitious India has ever done.
What they said: “We are now in a new era for trade and the economy," Starmer said. "That means going further and faster to strengthen the UK’s economy, putting more money in working people’s pockets. Through this government’s stable and pragmatic leadership, the UK has become an attractive place to do business. Today we have agreed a landmark deal with India - one of the fastest growing economies in the world, which will grow the economy and deliver for British people and business.”
A statement from Indian Prime Minister Narendra Modi’s office says that the countries’ leaders described the deal as a “historic milestone” for the partnership that would foster trade, investment, innovation and job creation in both the economies.
The statement continues that the leaders agree that expanding economic and commercial ties between India and the UK remains a cornerstone of the increasingly robust and multifaceted partnership.
