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Trade agreements

UK and India Sign Landmark Trade Agreement

Strategic Insights

— 1 min read

The United Kingdom and India have signed a trade agreement that reduces tariffs on goods from textiles to whisky, cars, and spices, allowing for increased market access for businesses. The deal was hailed as a "landmark moment" by British Prime Minister Keir Starmer, who hosted Indian Prime Minister Narendra Modi at his Chequers country estate. The agreement must still be ratified by the UK Parliament and is expected to boost trade between the two countries by 25.5 billion pounds ($34.4bn).

Key Takeaways:

  • The trade agreement reduces tariffs on British goods in India from 15 percent to 3 percent, with import taxes on whisky and gin decreasing from 150 percent to 40 percent over the next 10 years.
  • Automotive tariffs will fall from over 100 percent to 10 percent under a quota, and 99 percent of Indian exports will face no import duty under the deal.
  • The agreement is expected to add 4.8 billion pounds ($6.5bn) a year to the UK economy and boost trade by 25.5 billion pounds ($34.4bn).
  • The UK government has also announced almost 6 billion pounds ($8nm) in trade and investment deals in areas such as AI, aerospace, and dairy products.
  • The two countries have pledged to work more closely together in areas such as defence, migration, climate, and health.
  • The deal is seen as a template for potential agreements with the EU and other regions, with India aiming to establish its biggest strategic partnership with an advanced economy.

Statistics:

  • The UK and India have a trade relationship worth about 41 billion pounds ($55.3bn) and investment supporting more than 600,000 jobs across both countries.
  • The trade agreement is expected to add 4.8 billion pounds ($6.5bn) a year to the UK economy.
  • The deal will reduce India's average tariff on British goods from 15 percent to 3 percent.
  • Import taxes on whisky and gin will be halved from 150 percent to 75 percent before falling to 40 percent by year 10 of the deal.

Sources:

  • "UK and India sign deal to boost trade and investment" (https://www.aljazeera.com/tag/brexit/)
  • "India's Ministry of Commerce and Industry"

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