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Lucy Huker
Business Reporter, BBC News
After three years of negotiations, the United Kingdom and India have agreed on a commercial deal that will facilitate the United Kingdom companies to export whiskey, cars and other products in India and reduce taxes on exports of clothing and shoes in India.
The deal does not include any change in immigration policy, including Indian students studying in the UK, the British government said.
Business Secretary Jonathan Reynolds said the benefits for the United Kingdom’s business and users are “massive”.
Last year, the United Kingdom and India trade was 41 billion pounds and is already predicting to grow, but the government said the deal would strengthen this trade in an additional 25.5 billion British pounds a year by 2040.
Reynolds met with his Indian counterpart Piyush Goyal in London last week to put the last touches on the deal.
Once it can take up to one year, the UK users are likely to benefit from reducing the rates for goods coming to the country from India, the Ministry of Business said.
In addition to clothing, this will include some Indian foods such as frozen shrimp, jewelry and precious stones.
The government also emphasized the benefits of economic growth and job creation by United Kingdom companies, expanding exports to India.
The gin and whiskey tariffs will be halved to 75%, with a more increasing reduction in the shorter years.
Car, aerospace, electric and some food in the UK will also fall, including lamb, salmon, chocolates and cookies.
The British Government said the deal was “the largest and most economically significant” bilateral trade agreement, which the United Kingdom signed after the departure of the European Union in 2020.
Britain for business and tradePrime Minister Sir Kyar Starmer has described it as a “remarkable deal” that will strengthen growth and “will be delivered to British people and business.”
India’s Prime Minister Narendra Modi described the deal as a historical stage that was “ambitious and mutually profitable.”
It includes a three -year release from social security paid by Indian employees working in the UK.
India is planned to become the third largest economy in the world in a few years.
US President Donald Trump’s tariff campaign focuses minds in other countries on how to react and increase the impetus to reach commercial deals.
The United Kingdom also has a high priority trading partner for Prime Minister Modi’s Government, which has an ambitious goal of increasing exports by $ 1 trillion by 2030.
Rain Newton-Smith, CEO of Business Lobby Group, CBI, welcomes the deal, saying that it provides a “beacon of hope in the ghost of protectionism” after Trump’s tariffs.
The United Kingdom business saw “countless” opportunities on the Indian market, she added.
Ali Renison of the SEC Newgate communication company and a former government councilor said the deal was potentially “transformational” due to the size of India, growth rates and relatively high existing barriers to access to its market.