UK-India trade agreement a big deal for business – Chamber

Business leaders today welcomed a landmark trade deal between the UK and India which has been agreed after three years of talks.

The agreement will make it easier for UK firms to export products such as whisky and cars to India, as well as cutting taxes on India’s clothing and footwear exports.

Other products that will see UK tariffs fall include aerospace, electricals and medical devices, cosmetics, lamb, salmon, chocolates and biscuits.

Prime Minister Sir Keir Starmer said the deal would boost the economy and "deliver for British people and business".

Last year, trade between the UK and India totalled £42.6bn and was already forecast to grow, but the government said the deal would boost that trade by an additional £25.5bn a year by 2040.

Raj Kandola (pictured), director of external affairs at Greater Birmingham Chambers of Commerce, said: “A Free Trade Agreement (FTA) between the UK and India is a major boost to our respective economies and will be particularly welcome here in the West Midlands.

“India is one of our region’s biggest sources of investment – believed to be worth around £3.5bn and creating some 13,000 jobs over the past decade.

“This agreement also provides relief to exporters. Products from Scotch whisky to clothing will benefit and this will give UK companies exporting to India a clear edge on increasing sales. 

 “There is great potential for future expansion with a trusted trading partner in the fastest growing region of the world’s economy.  

 “Alongside our strengths in services trade, particularly in business, travel and transport services, this agreement can offer real hope that our bilateral trade will grow strongly.”

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.

Tariffs on gin and whisky will be halved to 75 per cent, with further reductions taking effect in later years.

Tariffs of 100 per cent on more expensive UK-made cars exported to India will fall to 10 per cent, subject to a quota limiting the total number.

The deal also includes provisions on the services sector and procurement allowing British firms to compete for more contracts.

Under the terms of the agreement, some Indian and British workers will also receive a three-year exemption from social security payments.

This applies to the staff of Indian companies temporarily transferred to the UK, and to UK firms' workers transferred to India.

Social security contributions will be paid by employers and employees in their home country only, rather than in both places.