'Multi-billion-pound boost': UK sees trade deal with India as 'huge economic win'

India and the UK on Tuesday announced a “landmark” multi-billion-pound trade deal, which is expected to boost bilateral trade between the world's fifth and sixth largest economies by 25.5 billion pounds a year from 2040.

According to a statement issued by the UK, the trade agreement locks in reductions on 90 per cent of tariff lines and is expected to add 4.8 billion pounds annually to the British economy by 2040.

For the UK, the biggest wins being highlighted are Scotch whisky tariffs set to be halved from 150 to 75 per cent and automotive tariffs set to fall from 100 to 10 per cent under a quota.

“Other goods with reduced tariffs, which can open markets and make trade cheaper for businesses and Indian consumers, include cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits,” the UK statement read.

The statement quoted UK PM Keir Starmer saying, "Through this government’s stable and pragmatic leadership, the UK has become an attractive place to do business. Today we have agreed a landmark deal with India - one of the fastest growing economies in the world, which will grow the economy and deliver for British people and business. Strengthening our alliances and reducing trade barriers with economies around the world is part of our Plan for Change to deliver a stronger and more secure economy here at home. "

Based on 2022 trade statistics, the department claims this amounts to India cutting tariffs worth over 400 million pounds when the deal comes into force, which will more than double to around 900 million pounds after 10 years.

"By striking a new trade deal with the fastest-growing economy in the world, we are delivering billions for the UK economy and wages every year and unlocking growth in every corner of the country, from advanced manufacturing in the North-East to whisky distilleries in Scotland,” said Reynolds.

“In times of global uncertainty, a pragmatic approach to global trade that provides businesses and consumers with stability is more important than ever,” he said.

The FTA is expected to increase bilateral trade, which stands at 41 billion pounds a year, by an additional 25.5 billion pounds, with UK wages up by 2.2 billion pounds each year in the long run.

India and the UK had restarted negotiations on an FTA this February after a pause in the three-year negotiations for general elections last year.

An accompanying Bilateral Investment Treaty (BIT), which was also being negotiated in parallel, has not gone over the line at this stage, but UK officials indicated that it is hoped that it will conclude soon too.