Prime Minister Keir Starmer will meet Indian PM Narendra Modi on Thursday to rubberstamp a trade deal, which is expected to add around £4.8billion to the UK economy each year
Keir Starmer will sign off a major trade deal to make it easier for British firms to sell goods like whisky, cosmetics and cars to India.
The Prime Minister will meet Indian PM Narendra Modi on Thursday to rubberstamp the pact, which will add around £4.8billion to the UK economy each year. The agreement will slash tariffs on trade between the UK and India, making it easier for UK firms to export and potentially offering cheaper prices to shoppers.
India’s average tariff on UK products will drop from 15% to 3%, so it is cheaper for British companies to sell goods to the Indian market. Whisky producers will see tariffs slashed in half from 150% to 75%, and duties are expected to fall further to 40% over the next ten years.
Tariffs on British cars will fall from 110% to 10% under a quota system, and other industries including soft drinks and cosmetics are also expected to see cheaper duties.
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In return, the UK is expected to reduce tariffs on imports from India, which is likely to mean lower prices for British shoppers on clothing, footwear, and food.
The deal is being billed as a major win for Britain amidst the chaos triggered by Donald Trump’s trade tariffs. As one of the world’s largest economies, India has long been a target for Brexiteers keen to show the benefits of leaving the European Union.
Boris Johnson began negotiations in 2022 but failed to deliver on his boast that he would get a deal “done by Diwali”. His Tory successors Liz Truss and Rishi Sunak also struggled to make progress, with stumbling blocks including Indian tariffs on Scotch whisky and visa rules.
The agreement is the most significant bilateral trade deal since the UK left the EU, as India is the UK’s 11th largest trading partner, with trade of goods and services worth around £42.6bn last year. It is expected to boost that trade by an additional £25.5bn a year by 2040, and drive up British exports by another £15.7bn.
The Prime Minister said: “Our landmark trade deal with India is a major win for Britain. It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country, delivering on our Plan for Change.
“We’re putting more money in the pockets of hardworking Brits and helping families with the cost of living, and we’re determined to go further and faster to grow the economy and raise living standards across the UK.”
The deal is expected to create another 2,200 jobs across the country and attract £6 billion investment by British and Indian businesses, according to the Government.
Some Indian and British workers will also gain from a three-year exemption from social security payments, to stop them from being forced to pay twice if they are temporarily transferred abroad. The UK has similar deals with countries like the USA, Canada and the EU.
The deal does not include any change to UK immigration policy, including for Indian students, which had previously been a sticking point.
William Bain, Head of Trade Policy at the British Chambers of Commerce, said: “The signing of this agreement is a clear signal of the UK’s continuing commitment to free and fair trade. It will open a new era for our businesses and boost investment between two of the world’s largest economies.
“Currently around 16,000 UK companies are trading goods with Indian companies, and there is high interest in our Chamber Network to grow that. This deal will create new opportunities in the transport, travel, creative and business support sectors alongside traditional strengths in finance and professional services.”
The PM and his Indian counterpart are also expected to discuss bolstering joint efforts to tackle illegal migration and organised crime.
Mr Modi is expected to meet King Charles on his two-day visit.
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