After three years of negotiations, the United Kingdom and India have concluded a historic free trade agreement, marking the UK's most significant trade pact since its departure from the European Union. This deal is projected to enhance bilateral trade by £25.5 billion ($34 billion) annually by 2040. The agreement introduces substantial tariff reductions on a range of goods. Notably, Indian import duties on British whisky and gin will decrease from 150% to 75% immediately, with a further reduction to 40% over the next decade.

Automobile tariffs will be lowered from over 100% to 10% under a new quota system. Additionally, tariffs on British exports such as cosmetics, medical devices, and aerospace components will see significant cuts. Conversely, 99% of Indian exports, including textiles, food products, and jewellery, will become duty-free in the UK. Beyond goods, the agreement encompasses services and mobility provisions. It includes visa access for Indian professionals like chefs, musicians, and yoga instructors, facilitating cultural and professional exchanges.

A social security arrangement will exempt temporary Indian workers in the UK from dual contributions for up to three years, benefiting both economies. Prime Ministers Keir Starmer and Narendra Modi hailed the deal as a strategic milestone, emphasizing its potential to foster economic growth, innovation, and stronger bilateral ties. The agreement is expected to boost the UK’s GDP by £4.8 billion and increase wages by £2.2 billion over the next 15 years.

This trade pact arrives amid global economic uncertainties, including recent tariff escalations by the United States. By strengthening economic collaboration between the world's fifth and sixth largest economies, the UK-India agreement aims to provide stability and mutual growth opportunities.