Britain and India have signed a long-anticipated trade deal that is expected to boost the UK economy by £4.8 billion a year by 2040. Finalised after more than three years of negotiations under multiple governments, the agreement is one of the most significant post-Brexit wins for British trade.
The deal focuses heavily on tariff reductions across a wide range of goods. India will cut tariffs on 90% of UK product lines, including whisky, gin, chocolate, biscuits, cosmetics, lamb, salmon, soft drinks, aircraft parts, medical devices and electrical machinery. Based on 2022 trade data, these reductions will save UK exporters £400 million annually from day one.
Tariffs on British whisky and gin, currently at 150%, will drop to 75% initially, and fall further to 40% by the tenth year. For British-made cars, tariffs will fall from 110% to 10%, though quotas will apply to exports in both directions.
In return, the UK will lower tariffs on Indian clothing, footwear, and food products, offering consumers greater choices and potentially lower prices.
The deal also includes a reciprocal exemption from national insurance contributions for workers temporarily seconded between the two countries for up to three years. Though this has sparked controversy in the UK, it was a key demand from Delhi and a central sticking point in talks. India’s government has hailed the exemption as a “huge win” and a landmark achievement.
Ministers say the deal will strengthen economic ties, open new markets, and support industries.
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