In a groundbreaking move that marks the most significant UK trade deal since Brexit, the United Kingdom has struck a historic free trade agreement with India, projected to boost the UK economy by £4.8 billion and increase wages by £2.2 billion each year in the long term. The agreement promises to revolutionize trade relations between two of the world’s largest economies, delivering tangible benefits for working people and businesses across the UK.
Finalized after intensive negotiations between UK Business and Trade Secretary Jonathan Reynolds and India’s Commerce Minister Piyush Goyal, the deal unlocks massive potential in bilateral trade—estimated to increase by £25.5 billion—by removing or reducing tariffs on a wide range of goods and services. Notably, the deal slashes Indian tariffs on key British exports such as whisky, gin, medical devices, and cosmetics, offering British businesses a competitive edge in the rapidly expanding Indian market.
Major Tariff Reductions Across Sectors
Indian tariffs will be reduced on 90% of UK export tariff lines, with 85% of them set to become fully tariff-free within a decade. This includes:
- Spirits: Tariffs on whisky and gin, currently at 150%, will be halved immediately and reduced to 40% over ten years.
- Automotive: High automotive tariffs exceeding 100% will drop to 10% under a controlled quota system.
- Goods: Key UK exports—such as aerospace components, cosmetics, salmon, chocolate, electrical machinery, lamb, and medical devices—will benefit from substantial tariff reductions.
Indian consumers will access to a wider array of UK goods at lower prices, while British shoppers may see price drops on imported items like frozen prawns, clothing, and footwear as the UK reciprocally liberalizes tariffs.
Economic Growth and Regional Gains
Delivering on the government’s “Plan for Change”, the agreement is poised to deliver growth across all UK regions. According to government projections, the deal could add:
- £4.8 billion to UK GDP
- £2.2 billion in annual wage growth
- Over £900 million in tariff reductions on Indian imports over ten years
Prime Minister Keir Starmer hailed the deal as a transformative moment:
“We are now in a new era for trade and the economy. This deal with India, one of the fastest-growing economies in the world, is a direct result of our stable and pragmatic leadership. It will grow the economy, raise living standards, and put money in working people’s pockets.”
Business and Trade Secretary Jonathan Reynolds emphasized the deal’s broad reach:
“From whisky distilleries in Scotland to advanced manufacturing in the North East, this deal unlocks new growth in every corner of the UK. In times of global uncertainty, this pragmatic and ambitious trade policy ensures our businesses and consumers benefit from greater stability and opportunity.”
Empowering Small Businesses and High-Growth Sectors
Exporters of all sizes stand to gain, especially SMEs, with India agreeing to:
- Streamline customs procedures
- Publish import laws online in English
- Support digital trade via e-contracts and e-transactions
Strategic industries such as clean energy, advanced manufacturing, and life sciences are also set to benefit. India has committed to opening its massive procurement markets to UK renewable energy firms and reducing barriers for UK medical device exports. The creative sector gains enhanced copyright protections, and UK services—already exporting £500 billion globally—will now enjoy improved market certainty in India.
Strong Support from Industry Leaders
The business community has welcomed the deal with enthusiasm:
- Scotch Whisky Association CEO Mark Kent called the agreement “transformational,” predicting a £1 billion export boost and 1,200 new UK jobs.
- Standard Chartered CEO Bill Winters hailed it as a “significant achievement” to drive innovation and growth.
- Premier League CEO Richard Masters praised the deal’s potential to deepen engagement with Indian fans and support UK football’s global expansion.
- UPS UK Managing Director Markus Kessler and UK-India Business Council Chair Richard Heald also welcomed the move, highlighting it as a major leap for global trade and UK-India collaboration.
Ethical Commitments and Public Protections
The deal also includes landmark provisions for anti-corruption, labour rights, gender equality, and consumer protections—marking the first time India has signed such commitments in a trade agreement. It also upholds UK standards on the NHS, food, animal welfare, and immigration. With over 1.9 million people of Indian heritage living in the UK, the agreement is expected to deepen cultural and economic ties between the two nations, enhancing what is already one of the UK’s most important bilateral relationships.
