Britain and India have both agreed a free trade deal which will see cheaper prices on the high streets.
The deal will see Indian tariffs “slashed” on a variety of imported goods and the UK will cut some import levies, which comes as India has been seeking cuts on visa rules to allow for easier transfer of staff to work in Britain.
The agreement will see an increase in bilateral trade by £25 billion by 2040 which will see “clear and agreed routes.”
The government has agreed a “double contribution convention” meaning Indian workers will pay no national insurance for the UK and India in the first three years.
The Department for Business and Trade said they will “lock in” reductions on 90% of tariffs within the agreement and within a decade 85% will become “fully tariff free.”
Car tariffs will fall from more than 100% to 10%, whisky and gin tariffs will come down by half from 150% to 75% and will then be reduced to 40% within ten years.
Soft drinks, biscuits, chocolate, aerospace, electrical machinery and medical devices will also be reduced among others.
The agreement between the UK and India will see cuts of over £400 million on Indian tariffs that will double after ten years.
The Prime Minister spoke to the Indian Prime Minister Narendra Modi said, “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.”
Reacting to news of an agreement in principle for a free trade deal between the UK and India, William Bain, Head of Trade Policy, said, “A Free Trade Agreement (FTA) between the UK and India is a huge boost to our economies and a welcome lift for our exporters. Both Governments should be congratulated for their strong engagement with business and hard work throughout long, but ultimately successful, negotiations.
“Against the backdrop of mounting trade uncertainty across the globe, these tariff reductions will be a big relief. Products from Scotch whisky to clothing will benefit and this will give UK companies exporting to India a clear edge on increasing sales.
“There is great potential for future expansion with a trusted trading partner in the fastest growing region of the world’s economy.
“Alongside our strengths in services trade, particularly in business, travel and transport services, this agreement can offer real hope that our bilateral trade will grow strongly.
“The proposals for a follow-up Investment Treaty will also provide a solid platform to grow manufacturing and other sectors in our two economies.
“Negotiation is the best way to deliver results for business in trade. Chambers look forward to working with companies of all sizes to use this landmark agreement to drive a step change in exports and economic growth.”
Richard Heald, Chair of the UK India Business Council (UKIBC) – a member of the BCC’s international Chamber Network, said, “The UK India Business Council welcomes the signing of the FTA between the United Kingdom and India. This marks a significant milestone in the deepening of economic and strategic ties between our two nations.
“It matters when the fifth and sixth largest economies in the world reach a trade agreement. Such an agreement is illustrative of the positive momentum in the UK-India relationship, the commitment and ambition of both Governments, and the opportunities for greater trade, investment and collaboration between our countries.
“While we await the full details of the agreement, we are optimistic that it will pave the way for enhanced trade flows, increased investment, and strengthened business partnerships across key sectors.
“The UKIBC stands ready to support our members, clients, and stakeholders in navigating the opportunities the FTA presents, and we will continue to work closely with both governments to ensure the agreement delivers tangible benefits for businesses of all sizes.
“We understand that signing of the agreement is starting point and it will need a Parliamentary signoff to enter into force, allowing businesses to take advantage of the new trade rules and opportunities.”
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