‘Landmark’ India trade deal boost for UK economy – Daily Business

A trade deal with India has been agreed that will make it easier for UK firms to export a range of goods and services including whisky, salmon, financial services and cars.

Business Secretary Jonathan Reynolds described the benefits of the deal for UK businesses and consumers as “massive”.

Gin and whisky tariffs will be halved to 75%, before falling to 40% by year ten. Levies on cars, aerospace, electricals and some UK food products will also fall.

Scottish shoppers could see cheaper prices and more choice on clothes, footwear, and food products, including frozen prawns as UK liberalises tariffs.   

The deal is expected to increase the current £41bn of bilateral trade by £25.5bn, UK GDP by £4.8bn and wages by £2.2bn each year in the long run as India is forecast to become the world’s third-largest economy in a few years.

The British government said the deal was the “biggest and most economically significant” bilateral trade agreement the UK had signed since leaving the European Union in 2020.

Prime Minister Sir Keir Starmer described it as a “landmark deal” which would boost growth and “deliver for British people and business”.

Scottish Secretary Ian Murray said: “This deal is great news for Brand Scotland, with our goods, businesses and services gaining access to what is projected to be the world’s third largest economy by 2027.  

“It’s especially exciting for our world-renowned whisky industry with tariffs being slashed on Scotch exports. 

“From food, drink and textiles production, to clean energy, advanced manufacturing, life sciences and financial services, Scotland has so much to offer India and the UK Government is determined to make the most of those opportunities.”  

India’s prime minister, Narendra Modi, described the deal as an historic milestone that was “ambitious and mutually beneficial”.

Some analysts and commentators are saying the deal was given additional impetus by US President Donald Trump’s tariff campaign which has focused minds in other countries on striking new deals.

Jim Brown, chief operating officer at audit, tax and business advisory firm Blick Rothenberg, said: “It has taken this government and the last a long time to progress the trade deals that were promised post Brexit. 

“They are very complicated to negotiate but perhaps the current debates around tariffs, and the uncertainty this is causing for businesses, has helped focus attention and more deals will follow.”

Rain Newton-Smith, chief executive of the CBI, welcomed the deal saying it provided a “beacon of hope amidst the spectre of protectionism” following Trump’s wave of tariffs.

UK businesses saw “myriad” opportunities in the Indian market, she added.

William Bain, head of trade policy at the British Chambers of Commerce, said:    “A Free Trade Agreement (FTA) between the UK and India is a huge boost to our economies and a welcome lift for our exporters.

“Both Governments should be congratulated for their strong engagement with business and hard work throughout long, but ultimately successful, negotiations.” 

Diageo chief executive Debra Crew said: “Today’s agreement is a huge achievement by Prime Ministers Modi and Starmer and Ministers Goyal and Reynolds, and all of us at Diageo toast their success.  

“It will be transformational for Scotch and Scotland, while powering jobs and investment in both India and the UK.  

“The deal will also increase quality and choice for discerning consumers across India, the world’s largest and most exciting whisky market.” 

Leon Thompson, executive director of UKHospitality Scotland, said: “We’re pleased that the Scottish Government has acted on our calls not to impose further costly regulation onto hospitality businesses in this Programme for Government.

“It’s also positive to receive news that the Scottish Government will not be proceeding with its ‘latte levy’ this year. It’s clear they have listened to representations from UKHospitality Scotland that the charge would be unfair and disproportionately hit low-income consumers.

“We continue to urge the Government not to progress other regulation currently under consideration this side of the election. This is critical at a time when our sector is already grappling with £100 million in additional employment taxes imposed by the UK Government.

“We have also long called for reform of the broken business rates system and a review into the valuation used to calculate rates is encouraging. However, we note that the review only references licensed hospitality and we believe it’s imperative that this review encompasses the entirety of the sector.