Rio de Janeiro, Brazil - November 18: British Prime Minister Sir Kyle Stamer (L) attended the G20 summit at the Museum of Modern Art in Rio de Janeiro, Brazil on November 18, 2024 at a bilateral meeting with Indian Prime Minister Narendra Modi. Keir Starmer is about to attend his first G20 summit since he was elected to the UK. He is expected to hold talks with President Xi Jinping of China, the first time the British Prime Minister has done so for six years. (Photography by Stefan Rousseau - WPA Pool/Getty Images)
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Britain and India signed a bilateral trade agreement on Tuesday to lower tariffs on key exports such as British whiskey and cars amid the global trade war initiated by the United States.
According to the UK government, the agreement will gradually reduce taxes on imports from the UK, with most goods fully exempted for ten years”.
Exports from the UK, such as whiskey and gin, will reduce the tariffs from 150% to 75%, and then reduce the tariffs to 40% over the decade under the agreement. Meanwhile, the government added that tariffs on many vehicles will be reduced sharply from over 100% to 10%.
The trade agreement between India and the UK comes at a time when global trade tensions are intensifying. U.S. President Donald Trump has raised tariffs on global imports, imposing tensions with allies and opponents.
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The UK government said the agreement is expected to increase bilateral trade by 25.5 billion pounds ($34 billion). Trade between the two countries was £42.6 billion in 2024, an increase of 8.3% from the previous year.
By the end of 2024, the UK has a trade deficit of £8.4 billion with India in terms of goods and services. South Asian countries are the country's 11th largest trading partner.
The deal is the Premier League for British Prime Minister Kier Starmer.
Commerce and Commerce Minister Jonathan Reynolds welcomed India's Minister of Industry and Commerce Piyush Goyal to London for trade negotiations.
Ministry of Commerce and Trade
"Today, we agree to a landmark agreement with India, one of the fastest growing economies in the world, which will develop the economy and serve the people and businesses of the UK," Starmer said in a statement.
“Strengthening our alliances and reducing trade barriers to economies around the world is part of our plan to provide a stronger and safer economic change at home.”
Indian Prime Minister Narendra Modi posted on X that the deal would "deeper" relations between the two countries. "In a historic milestone, India and the United Kingdom have successfully concluded an ambitious mutually beneficial free trade agreement, as well as a double donation convention," Modi said.
"These landmark agreements will further deepen our comprehensive strategic partnership and catalyze trade, investment, growth, job creation and innovation in both of our economies," he added.
The deal was reached within trade tensions with the United States.
"The timing couldn't be better, and the FTA strengthens economic resilience in the UK and India by providing vulnerability to access new markets and reducing external shocks," said Keshav R. Murugesh, CEO of the New York Stock Exchange. WNSis a business transformation and service company operating in the United States, the United Kingdom and India.
Murugesh, also chairman of the Federation of Indian Industry British Business Forum, added: “This is especially important in a world with increasing trade tensions.”