Britain, India to sign landmark free trade pact during Modi visit
The two countries concluded talks on the long-coveted free trade pact in May after three years of stop-start negotiations, with both sides hastening efforts to clinch a deal in the shadow of tariff turmoil sparked by US President Donald Trump.
The agreement between the world's fifth and sixth largest economies aims to increase bilateral trade by 25.5 billion pounds by 2040. It will take effect after the British parliament and India's federal cabinet approve it, likely within a year.
"Our landmark trade deal with India is a major win for Britain. It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth," British Prime Minister Keir Starmer said.
The agreement will be signed during Modi's fourth visit to the UK since he took office in 2014. The leaders will also sign a strategic partnership covering areas such as defence and climate and strengthen co-operation on tackling crime.
Under the trade agreement, tariffs on Scotch whisky will drop to 75 per cent from 150 per cent immediately, and then slide to 40 per cent over the next decade, according to the British government. On cars, India will cut duties to 10 per cent from over 100 per cent under a quota system that will be gradually liberalised.
In return, Indian manufacturers are expected to gain access to the UK market for electric and hybrid vehicles, also under a quota system, Indian commerce ministry officials said.
The ministry has said 99 per cent of Indian exports to Britain would benefit from zero duties under the deal, including textiles, while Britain will see reductions on 90 per cent of its tariff lines.
The agreement represents Britain's most significant trade deal since it left the EU in 2020, though the projected boost to British economic output, of 4.8 billion pounds a year by 2040, is small compared to the country's gross domestic product of 2.6 trillion pounds in 2024.
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