Britain and India sign free trade pact during Modi visit

Britain and India have signed a landmark free trade deal that slashes tariffs on key goods and opens up markets, marking the UK’s biggest post-Brexit trade agreement and a new economic era for India.

The United Kingdom and India finalized a major free trade agreement during Indian Prime Minister Narendra Modi’s visit to London, aiming to deepen economic ties and boost trade by £25.5 billion ($34 billion) by 2040.

The deal, concluded after three years of negotiations, reduces tariffs on a wide range of goods including Scotch whisky, cars, textiles, and jewelry.

British Prime Minister Keir Starmer called it “a huge benefit” for both sides, saying it makes trade “cheaper, quicker and easier.”

"We've entered a new global era, and that is one that requires us to step up, not to stand aside... by building deeper partnerships and alliances," Starmer said.

Modi described the agreement as “a blueprint for our shared prosperity.”

They also agreed a partnership covering areas such as defence and climate, and said they would strengthen co-operation on tackling crime.

Tariffs on Scotch whisky will drop from 150% to 75% immediately, falling further to 40% over ten years. Car duties will be cut to 10% within five years, and Indian exports like seafood and jewelry will enjoy better market access. The UK will also open up to Indian electric and hybrid vehicles under a quota system.

According to officials, 99% of Indian exports will face zero tariffs, while the average tariff on UK goods will drop from 15% to 3%. 

Although India didn’t secure an exemption from the UK's upcoming Carbon Border Adjustment Mechanism, the agreement paves the way for future investment talks and gives UK firms access to India’s clean energy and insurance markets.

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