UK and India sign a ‘landmark’ trade agreement after years of tough negotiations

The two countries have agreed on a long-stalled free trade agreement that will slash tariffs on Scotch whisky and scores of other products.

UK Prime Minister Keir Starmer and Indian Prime Minister Narendra Modi.

Britain and India announced Tuesday that they have agreed on a long-stalled free trade agreement that will slash tariffs on Scotch whisky and scores of other products.

The deal comes more than three years after negotiations started — and stalled — under a previous British government.

Indian Prime Minister Narendra Modi said on X that the deal was “ambitious and mutually beneficial.”

UK Prime Minister Keir Starmer hailed the deal a “landmark.”

“We are now in a new era for trade and the economy,” Sir Keir said, adding the deal “will grow the economy and deliver for British people and business”.

The British government said the deal will reduce Indian import taxes on whisky, cosmetics, medical goods, car and aeroplane parts and other goods from the UK.

Whisky and gin tariffs will be halved from 150 per cent to 75 per cent before falling to 40 per cent by year 10 of the deal. Automotive tariffs will fall from more than 100 per cent to 10 per cent under a quota.

Britain said the deal is expected to increase bilateral trade by 25.5 billion pounds ($52.72 billion) a year “in the long run.”

Mark Kent, chief executive of the Scotch Whisky Association, said the deal would be “transformational” for the industry.

India is one of the world’s largest whisky markets. He said it had “the potential to increase Scotch whisky exports to India by 1 billion pounds over the next five years.” Formal talks that began in 2022 on a free-trade agreement were hailed by then-Prime Minister Boris Johnson as a key goal after Britain’s departure from the European Union in 2020. Mr Johnson famously promised to have a deal done by Diwali in October of that year.

The two countries held 13 rounds of negotiations without a breakthrough before talks were suspended while both nations held 2024 general elections.

Mr Modi was re-elected, and Britain replaced the Conservative government with one led by Sir Keir Labour Party.

In his social media post, Mr Modi said the deal would help “catalyse trade, investment, growth, job creation, and innovation in both our economies”.

AFP, AP