The United Kingdom and India have finalised a major trade agreement after three years of negotiations, paving the way for billions in bilateral commerce and investment.

The deal, described by the British government as its “most significant” bilateral agreement since Brexit, will reduce tariffs and expand market access for key sectors, including whisky, automobiles, clothing, and medical devices.

Prime Minister Sir Keir Starmer hailed the pact as a “landmark moment” that would strengthen the UK economy and "deliver for British businesses and workers." Indian Prime Minister Narendra Modi called it a “historic and ambitious” step that would accelerate growth, job creation, and innovation in both nations.

Under the agreement, India will cut steep tariffs on UK-made whisky and premium cars—currently at 150% and 100% respectively. In return, the UK will ease duties on Indian exports such as textiles, footwear, seafood, and jewellery.

Trade between the two countries was worth £42.6bn in 2023 and is projected to grow by an additional £25.5bn annually by 2040, according to UK government estimates.

The deal also includes new provisions on services, digital trade, and government procurement, allowing British firms greater access to Indian contracts. A key element is a three-year exemption from double social security contributions for temporary workers transferred between the two countries.

However, opposition parties have raised concerns. Conservative MP Kemi Badenoch criticised the agreement as creating "two-tier taxes," while the Liberal Democrats questioned potential tax loopholes for companies employing Indian workers in the UK.

The government assured that National Insurance exemptions will not impact NHS funding, as Indian workers will continue to pay the immigration health surcharge.

Business groups welcomed the breakthrough, with the CBI calling it a “beacon of hope” in an era of rising global protectionism.

SMS/