India-UK FTA Deal: UK Tariffs on Goods to India Set To Reduce from 15% to Just 3%: UK Statement

The highly anticipated India-UK Free Trade Agreement (FTA) is set to slash average tariffs on UK goods entering India from a hefty 15% down to just 3%. The dramatic shift, announced by the British government ahead of a high-profile signing ceremony attended by Prime Minister Narendra Modi and his UK counterpart Keir Starmer, promises windfalls for businesses, consumers, and workers on both sides.

Here are a few important points to know:

Tariff Shock: Average tariffs on UK goods going to India drop from 15% to just 3%.

Whisky Bonanza: British whisky to see duties halved from 150% to 75% immediately, heading to 40% in ten years—giving the UK a killer export advantage.

Export Explosion: UK exports to India are projected to rise nearly 60% long-term—a potential £15.7 billion increase.

Jobs and Wages Surge: Over 2,200 new UK jobs, with British worker wages collectively rising by £2.2 billion per year.

Massive Investment: Nearly £6 billion in new investment and export wins welcomed.

Sectors Set to Soar: Aerospace, tech, advanced manufacturing, luxury goods, textiles, leather, footwear, gems, and more all primed for a boom.

Blockbuster Benefits

British businesses, from soft drinks to cars and cosmetics to medical devices, will find new opportunities in India’s fast-growing market. Whisky producers are big winners, with tariffs slashed immediately and further phased down, leaving international rivals in the dust.

Meanwhile, India will enjoy near-total tariff elimination on 99% of goods, benefiting vital sectors like textiles, engineering, sports goods, marine exports, and gems.

Big Deals Already Rolling

Airbus & Rolls-Royce: Set to deliver aircraft—over half powered by UK engines—to Indian airlines, marking £5 billion in new contracts.
New Business Wins: 26 British companies have already landed deals in India, with more in the pipeline.

Future Impact

Experts predict the FTA will trigger a 39% jump in bilateral trade, reaching an extra £25.5 billion per year by 2040 compared to a scenario without the agreement. The deal also unlocks India’s procurement market for Britain’s clean energy companies just as India accelerates its green energy revolution. “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 in every corner of the country, delivering on our Plan for Change,” said Prime Minister Keir Starmer.

The Bigger Picture
This agreement is more than just numbers; it’s a strategic, market-opening move aligned with India’s Viksit Bharat 2047 vision and the UK’s ambitions for global trade leadership. As Commerce and Industry Minister Piyush Goyal helps ink the final deal in London, both nations stand ready to capitalize on one of the boldest economic plays of the decade.

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