UK and India Seal Landmark Trade Deal

Big news for British trade... The UK and India have finalised a major trade agreement that promises to open up new opportunities for exporters and importers on both sides.

After three years of negotiation, the deal is being described by the UK government as a “landmark agreement” that will strengthen economic ties and boost growth.

What the deal means

The agreement will make it easier for UK firms to export products such as whisky, cars and luxury goods to India, while also cutting tariffs on Indian imports including clothing, footwear, jewellery and food.

Once implemented, UK consumers are expected to benefit from lower prices on popular Indian goods such as:

• clothing and footwear

• jewellery and gems

• frozen prawns and foodstuffs

  
  

In return, India will reduce levies on:

• whisky and gin

• aerospace and medical devices

• higher-value cars

• lamb, salmon and chocolates

Debate over fair competition

Not everyone has welcomed the deal without concern. Opposition parties have warned that some of its provisions could undercut UK workers. The agreement extends an exemption on National Insurance contributions for Indian employees working temporarily in the UK from one year to three.

Critics argue this could make Indian workers cheaper to hire than British staff, especially since UK employer contributions have recently increased. The Indian government has called the exemption a “huge win” that will make Indian service providers more competitive in the UK market.

Economic impact and outlook

Prime Minister Sir Keir Starmer said the deal would “boost the economy and deliver for British people and business.” Trade between the two countries, worth £42.6 billion last year, is expected to rise by an additional £25.5 billion a year by 2040.

India’s Prime Minister Narendra Modi described it as “an historic milestone” that will drive “growth, job creation and innovation” in both economies.