LONDON (AP) — 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.” British Prime Minister Keir Starmer called it a “landmark” that was “fantastic news for British business, British workers and British shoppers.”
The U.K. government said the deal will reduce Indian import taxes on whisky, cosmetics, medical goods, car and airplane parts and other goods from the U.K. Whisky and gin tariffs will be halved from 150% to 75% before falling to 40% by year 10 of the deal. Automotive tariffs will fall from over 100% to 10% under a quota.
India’s Trade Ministry said 99% of Indian exports would face no import duty under the deal.
“This brings us closer to our goal of becoming a global economic powerhouse. It protects our core interests while opening doors to India’s greater participation in global value chains,” Trade Minister Piyush Goyal said.
Modi’s office said the agreement covered trade in both goods and services, and would “unlock new potential for the two nations to jointly develop products and services for global markets.”
Britain said the deal is expected to increase bilateral trade by 25.5 billion pounds ($34 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, and Kent said the agreement had “the potential to increase Scotch whisky exports to India by 1 billion pounds over the next five years.”
The deal comes as countries around the world scramble to strike trade deals to make up for tariffs imposed by President Donald Trump on America’s trading partners.
Rain Newton-Smith, chief executive of employers’ organization the Confederation of British Industry, said the U.K.’s trade deal with India was a “beacon of hope amidst the specter of protectionism.”
U.K.-India trade negotiations began long before Trump’s re-election. Formal talks began in 2022 on a that then-Prime Minister Boris Johnson hailed as a key goal after Britain’s departure from the European Union in 2020. 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.
Modi was re-elected, and Britain replaced the Conservative government with one led by Starmer’s Labour Party.
The two leaders spoke by phone on Tuesday, and Modi said he had invited Starmer to visit India soon. Starmer’s office said he would go there “at the earliest opportunity.”
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Roy reported from New Delhi.
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