Rio de Janeiro, Brazil – November 18: British Prime Minister Sir Keir Starmer (L) during a bilateral meeting with the Prime Minister of India Narendra Modi while he attended the G20 summit at the Museum of Modern Art on November 18, 2024 in Rio de Janeiro, Brazil. Keir Starmer attends his first G20 summit since his elected Prime Minister of the United Kingdom. He should speak with President Xi Jinping de China, the first time that a British Prime Minister has been doing it for six years. (Photo by Stefan Rousseau – WPA Pool / Getty Images)
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The United Kingdom and India concluded a bilateral trade agreement on Tuesday, reducing key export prices such as British whiskey and cars, in the midst of a world trade war initiated by the United States.
The agreement will allow India to gradually reduce taxes on imports from the United Kingdom, the vast majority of negotiated goods becoming “entirely without prices in a decade”, according to the British government.
Exports from the United Kingdom, such as whiskey and gin, will see the prices reduced by half by 150% to 75%, before reducing 40% in a decade under the agreement. Meanwhile, many car rates will be greatly reduced by more than 100% to 10%, added the government.
The trade agreement between India and the United Kingdom occurs at a time of increase in trade tensions worldwide. US President Donald Trump has raised prices on imports around the world, tending relations with allies and adversaries.
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The British government said the agreement is expected to increase bilateral trade by 25.5 billion pounds Sterling ($ 34 billion). Trade between the two nations was 42.6 billion pounds sterling in 2024, up 8.3% compared to the previous year.
At the end of 2024, the United Kingdom had a trade deficit of 8.4 billion pounds sterling with India through goods and services. The South Asian nation was the country’s 11th trading partner.
The agreement is the first to be concluded under the leadership of the British Prime Minister Kier Starmer.
The Secretary of Affairs and Trade, Jonathan Reynolds, welcomes the Indian Minister of Commerce and Industry, Piyush Goyal in London for commercial negotiations.
Department of Affairs and Trade
“Today, we have concluded a historic agreement with India – one of the fastest growth economies in the world, which will grow the economy and deliver British and business,” Starmer said in a statement.
“The strengthening of our alliances and the reduction of commercial barriers with savings around the world is part of our change plan to offer a stronger and safer economy here at home.”
Prime Minister Narendra Modi posted on X that the agreement “will deepen” the relationship between the two countries. “In a historic stage, India and the United Kingdom successfully concluded an ambitious and mutually beneficial free trade agreement, as well as a double contribution agreement,” said Modi.
“These historical agreements will deepen our complete strategic partnership and will catalyze trade, investment, growth, job creation and innovation in our two economies,” he added.
The agreement comes in the middle of trade tensions with the United States.
“The timing could not be better, the FTA improving the economic resilience of the United Kingdom and India by giving access to new markets and by reducing vulnerability to external shocks,” said Keshav R. Murugesh, CEO of NYSE. WnsA transformation and commercial services company that operates in the United States, the United Kingdom and India.
“This is particularly important in a world where trade tensions are increasing,” added Murugesh, who is also president of the Indian industry business forum.
