UK concludes trade deal with India
Source: gov.uk (2025-05-05)

Multi-billion-pound boost to UK economy with landmark India trade deal to make working people better off

Huge economic win for UK as trade deal with India agreed which will deliver for working people and British businesses

Deal will slash Indian tariffs on key products such as whisky, cosmetics and medical devices, locking in reductions on 90% of tariff lines for UK exports to unleash opportunities for businesses across regions and nations of UK

Delivers on Plan for Change as £4.8 billion added to UK economy and £2.2 billion in wages every year in the long run under deal

The UK and India have today agreed a landmark trade deal which delivers on this government’s core mission of growing the economy, raising living standards, and putting money in people’s pockets.

Indian tariffs will be slashed, locking in reductions on 90% of tariff lines, with 85% of these becoming fully tariff-free within a decade.

Whisky and gin tariffs will be halved from 150% to 75% before reducing to 40% by year ten of the deal, while automotive tariffs will go from over 100% to 10% under a quota.

Other goods with reduced tariffs, which can open markets and make trade cheaper for businesses and Indian consumers, include cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits.

British shoppers could see cheaper prices and more choice on products including clothes, footwear, and food products including frozen prawns as UK liberalises tariffs.

The deal is expected to increase bilateral trade by £25.5 billion, UK GDP by £4.8 billion and wages by £2.2 billion each year in the long run.

UK businesses gain a competitive edge over international competitors when entering India’s enormous market as it gets even bigger, forecasted to become the 3rd largest global economy within three years.

Business and Trade Secretary Jonathan Reynolds and Indian Commerce Minister Piyush Goyal held final talks in London last week after relaunching negotiations only two months ago. Negotiators across both sides have worked around the clock since February to get this deal done, which is the biggest and most economically significant bilateral trade deal the UK has done since leaving the EU, and the best deal India has ever agreed.

Prime Minister Keir Starmer said:

We are now in a new era for trade and the economy. That means going further and faster to strengthen the UK’s economy, putting more money in working people’s pockets.

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.

Strengthening our alliances and reducing trade barriers with economies around the world is part of our Plan for Change to deliver a stronger and more secure economy here at home.

Business and Trade Secretary Jonathan Reynolds said:

This government’s number one mission is growing the economy as part of our Plan for Change so we can put more money in people’s pockets.

By striking a new trade deal with the fastest-growing economy in the world, we are delivering billions for the UK economy and wages every year and unlocking growth in every corner of the country, from advanced manufacturing in the North East to whisky distilleries in Scotland.

In times of global uncertainty, a pragmatic approach to global trade that provides businesses and consumers with stability is more important than ever.

At least 1.9 million people with Indian heritage call the UK their home and striking this deal will strengthen the vital partnership between our two democracies.

The benefits for UK businesses and consumers under this deal are massive, with wins across an array of sectors.

Notes to editors

Benefits for businesses of all sizes

Barriers to trading will be dropped, with India agreeing to reduce tariffs on a whole host of products including whisky, medical devices, advanced machinery, and lamb, making UK exports more competitive. Based on 2022 trade alone, this amounts to India cutting tariffs worth over £400 million when the deal comes into force, which will more than double to around £900 million after 10 years.

Exporting to this huge market will be easier than ever before thanks to India agreeing to release goods as quickly as possible after arrival at customs, work with the UK on one streamlined portal for trade and publish customs procedures and laws online in English. In addition, new digital commitments will support electronic contracts and transactions. These changes could particularly support small and medium-sized businesses, making it easier for them to enter the Indian market.

Delivering for high-growth sectors

High-growth sectors identified in the Industrial Strategy are supported through this deal, including:

Tariffs cut on the UK’s large and varied advanced manufacturing sectors from aerospace and automotive, electrical circuits and conductors, and high-end optical products.

The clean energy industry will have brand new, unprecedented access to India’s vast procurement market as the country makes the switch to renewable energy and continues to see growing energy demand.

Reduced tariffs on medical devices that take the UK’s complex supply chains into consideration will unleash new opportunities for the UK life sciences sector.

Enhanced copyright protections for the creative sector will give exporters confidence thanks to a commitment that their work will continue to be protected for at least 60 years.

World-class UK services sectors – who export just over £500 billion worldwide will now benefit from market certainty when trading into the growing Indian market.

More choice and protections for consumers

As bilateral trade grows under this deal, the UK will benefit from the best India has to offer with British shoppers enjoying access to a greater variety of clothes and shoes. New commitments will also help protect consumers from spam texts from India, which could include requiring opt-out or prior consent.

Mark Kent, Chief Executive of the Scotch Whisky Association, welcomed the “transformational” deal:

The UK-India free trade agreement is a once in a generation deal and a landmark moment for Scotch Whisky exports to the world’s largest whisky market. It shows that the UK government is making significant progress towards achieving its growth mission, and the Scotch Whisky industry looks forward to working with the UK and Indian governments in the months ahead to implement the deal, which would be a big boost to two major global economies during turbulent times.

The reduction of the current 150% tariff on Scotch Whisky will be transformational for the industry, and has the potential to increase Scotch Whisky exports to India by £1bn over the next 5 years, creating 1,200 jobs across the UK. It will also give discerning consumers in India far greater choice of brands, as more SME Scotch Whisky producers have the opportunity to enter the market.”

Premier League Chief Executive Richard Masters said:

India continues to be incredibly important to the Premier League and its clubs. It is a vibrant country that presents exciting opportunities and significant potential. The Premier League’s recent announcement of an office opening in Mumbai demonstrates our commitment to build on longstanding work to engage local fans, develop grassroots and elite football and further promote the game in India.

The continued growth of the Premier League and UK businesses in India will have a positive impact on our domestic economy and we welcome the news of this new trade deal secured by Government, which will support UK businesses operating in India.”

Bill Winters CBE, Group CEO of Standard Chartered and Co-Chair of the UK-India Financial Partnership, said:

The UK-India Free Trade Agreement is a significant achievement. It will create new opportunities for UK and Indian businesses, enable greater access to one of the world’s largest and most dynamic markets, and drive growth and innovation across the UK-India corridor. We welcome this strong commitment to partnership and prosperity.

Markus Kessler, Managing Director, UPS UK, Ireland and Nordics said:

We welcome the announcement of this important agreement between two countries that are both vital markets in our global network. We look forward to continuing to help businesses of all sizes across the UK reach new customers in one of the world’s most populous and dynamic countries.

Richard Heald, OBE, UK-India Business Council Chair said:

The UK India Business Council (UKIBC) welcomes the agreement of the new Free Trade Agreement 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.

Notes to editors
- We have championed our values – securing India’s first ever chapters on anti-corruption, consumer protections, labour rights, gender, and development. We have protected the NHS, ensured the points-based immigration system is not affected, upheld our high food standards, and maintained our animal welfare commitments throughout.
Data sources for this release include:

FTA economic impacts: DBT Technical Note (https://www.gov.uk/government/publications/uk-india-free-trade-agreement-technical-note): The preliminary economic impacts of the UK-India Free Trade Agreement

India forecast to become the 3rd largest global economy within three years: IMF World Economic Outlook April 2025

India is the fastest growing economy in the world: IMF World Economic Outlook April 2025

India and the UK are the fifth and sixth largest economies: IMF World Economic Outlook April 2025

1.9 million people with Indian heritage live in the UK: ONS 2021 Census

UK services exports are worth over £500 billion: ONS UK trade February 2025