The UK and India will sign a major trade agreement on Thursday. The agreement aims to boost British exports to India by 60% by 2040.
The deal, originally announced in May, will cut tariffs on over 90% of UK goods sold to India, with reductions phased in over ten years. Cosmetics, clothing, and food and drink will see the biggest tariff drops. The UK Government expects the agreement to benefit the economy by £4.8 billion a year.
Key UK winners include whisky and gin producers, with tariffs halving to 75% immediately and falling to 40% by year ten. Salmon, lamb, and machinery exports will see instant tariff cuts, while chocolate, cosmetics, and car parts will see gradual changes. India will reduce its auto import duty from over 100% to 10%, but quotas will apply.
In return, India will gain tariff-free access to about half its exports to the UK, including mangoes, grapes, textiles, and footwear, although many already face low tariffs.
The agreement also includes broader provisions, such as an extension of the “double contributions convention”, exempting Indian intra-company transferees and their employers from UK national insurance for up to three years. Critics argue this could unfairly favour Indian firms, but the Government insists it won’t affect immigration or hiring rules.
Bilateral trade exceeded $55bn in 2023/24.
Talk to us about your business.
