
India and the United Kingdom have signed a significant trade deal that is set to boost their economic relationship, even as US markets anxiously await progress on ongoing trade talks.
Announced on Tuesday, the deal will increase bilateral trade by £25.5 billion ($34 billion) annually, marking a 60% rise in trade over the next several years.
The UK government has hailed a new trade agreement with India as the most important bilateral deal since Brexit.
Under the agreement, India will significantly lower tariffs on a range of British goods, such as whisky, medical devices, and advanced machinery.
Over the next ten years, most of these tariffs will be completely removed, boosting trade between the two nations.
For example, India has agreed to cut duties on British whiskey and gin by half, from 75% to 40%, and reduce tariffs on cars, which can exceed 100%, to 10% under a quota system.
As part of the trade agreement with India, the UK will also lower tariffs on a variety of Indian products, including clothing, footwear, and frozen prawns, BBC said.
UK Prime Minister Keir Starmer expressed excitement over the deal, noting that it marks a new era for trade, especially post-Brexit.
"Strengthening our alliances and reducing trade barriers with economies around the world is part of our Plan for Change," Starmer said, emphasizing the importance of such agreements in fostering a stronger UK economy.
Today Britain and India have agreed a free trade deal.
— Compassion in World Farming UK (@ciwf) May 6, 2025
We're still waiting for the full details, but it's vital that tariff- or quota-free trade is not permitted for animal products that don't meet British animal welfare standards. pic.twitter.com/ez4MQKHUX8
UK-India Trade Deal Celebrated as a Major Win After Complex Negotiations
The deal has been lauded by experts as a win for both nations, particularly after years of complex negotiations.
Emma Rowland, policy adviser for trade at the UK's Institute of Directors, praised the deal, saying, "New partnerships that encourage free and open trade should be celebrated."
The UK-India trade agreement also highlights the challenges faced by the US in finalizing similar deals.
While President Donald Trump has repeatedly mentioned an impending agreement with India, no significant progress has been made, and US financial markets are growing increasingly concerned.
According to CNN, the Trump administration's tariffs, set to go into effect on July 8, could escalate global trade tensions, potentially leading to economic disruptions.
While the UK's success with India is celebrated, it comes amid continuing negotiations with other global partners.
For instance, the UK's deal with Japan, finalized in 2020, also sought to enhance trade by £15.2 billion ($20.3 billion).
However, many are watching to see whether agreements with the EU and the US will be reached soon, especially as the uncertainty of US tariffs looms over global markets.
Mark Kent, CEO of the Scotch Whisky Association, called the reduction in Indian tariffs "transformational," predicting it would significantly boost Scottish whisky exports by £1 billion over the next five years.
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