Beyond tariffs: India-UK historic trade deal bets on innovation, jobs, and shared supply chains

India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention, Prime Minister Narendra Modi has announced. “These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies,” Modi said in a message on the social media platform X.

The deal will make the import of items like Scotch whisky and medical devices from the UK to India cheap. India has offered tariff cuts on 90% of tariff lines for UK exports over a 10-year period under the deal, it is learnt. Import of automobiles will also become cheaper under the trade deal.

Meanwhile, the UK will slash the tariff rates on the export of a host of items, including clothes, footwear, and food products from India. India’s technology sector is expected to gain as the deal will allow cheaper import of advanced products from aerospace and automotive, electrical circuits, and high-end optical products. The final talks over the trade deal happened between Commerce Minister Piyush Goyal and the UK’s Business and Trade Secretary Jonathan Reynolds in London last week.

According to UK experts, the deal also includes a lot of commitments to ease of doing business. Meanwhile, an official press release stated that both Modi and British Prime Minister Keir Starmer described the trade deal as a historic milestone in the bilateral Comprehensive Strategic Partnership that would foster trade, investment, innovation and job creation in both economies. Both agreed that the landmark agreements between the two big and open market economies of the world will open new opportunities for businesses, strengthen economic linkages, and deepen people-to-people ties, it said.

The two leaders agreed that expanding economic and commercial ties between India and the UK remain a cornerstone of the increasingly robust and multifaceted partnership.

The conclusion of a balanced, equitable and ambitious FTA, covering trade in goods and services, is expected to significantly enhance bilateral trade, generate new avenues for employment, raise living standards, and improve the overall well-being of citizens in both countries. It will also unlock new potential for the two nations to jointly develop products and services for global markets. This agreement cements the strong foundations of the India-UK Comprehensive Strategic Partnership and paves the way for a new era of collaboration and prosperity, the release said.