Britain and India will commence a free trade agreement next month after New Delhi stated its concerns on the United Kingdom’s forthcoming steel tariff regime, which had threatened to delay implementation, had been addressed.
The two countries agreed to the long-anticipated trade pact last year, linking the world’s fifth and sixth largest economies in one of the most significant agreements of its kind amid global trade tensions linked to tariffs introduced during the administration of U.S. President Donald Trump.
The estimation of the UK government projects that the deal will increase British gross domestic product by £4.8 billion and raise bilateral by £25.5 billion in the long term.
In the agreement, India will reduce tariffs on whisky to 40% from 150% over a 10-year period and lower duties on automobiles to 10% under a quota system from 100%.
Simultaneously, Britain will reduce tariffs on imports including clothing, footwear and selected food products.
The two governments agreed to proceed with implementation of the agreement from July 15 following talks between British Prime Minister Keir Starmer and Indian Prime Minister Narendra Modi at the G7 summit in France.
Reacting to the deal, Modi described the agreement on X as a “historic milestone for India-UK relations,” noting it would boost bilateral trade and investment significantly.
Indian officials had raised concerns earlier that new UK steel trade measures could affect implementation of the agreement. The measures will also include reduced tariff-free quotas and higher duties on steel shipments.
The Indian government said 85% of its exports would not be affected by the steel measures and that products would still have access through quotas and other arrangements.
It said both sides had agreed, following discussions, to protect commercial interests, minimise market disruption and ensure a stable trading environment for exporters.
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