‘Major Win for Britain’: UK PM Keir Starmer Hails Landmark India-UK FTA as PM Modi Set to Sign Trade Deal

New Delhi: British Prime Minister Keir Starmer has called the “landmark” Free Trade Agreement (FTA) with India a “major win” for jobs and growth, as tariff cuts are set to bring down prices on clothes, shoes, and food products for British consumers. 

Starmer’s remarks came ahead of his bilateral meeting with Prime Minister Narendra Modi at Chequers on Thursday, where both leaders are also set to sign a renewed Comprehensive and Strategic Partnership to boost cooperation in defence, education, climate, technology, and innovation.

Tariff Cuts and Investment Announcements

The UK Department for Business and Trade (DBT) stated that under the FTA, India’s average tariff on UK products will drop from 15 per cent to 3 per cent, making it easier for British companies to sell goods ranging from soft drinks and cosmetics to cars and medical devices in the Indian market. Whisky producers will see tariffs halved from 150 per cent to 75 per cent immediately, dropping further to 40 per cent over the next decade, providing a competitive edge in India. 

According to the DBT, the UK already imports GBP 11 billion in goods from India, and liberalised tariffs are expected to make these products cheaper and easier to acquire. This is expected to bring savings for businesses importing components and materials for sectors such as advanced manufacturing and luxury goods.

'Major Win for Britain'

“Our landmark trade deal with India is a major win for Britain,” said Starmer.

“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,” he added.

“We’re putting more money in the pockets of hardworking Brits and helping families with the cost of living, and we’re determined to go further and faster to grow the economy and raise living standards across the UK,” said Starmer.

UK Business and Trade Secretary Jonathan Reynolds added, “The billions brought to our economy from the trade deal signed today will reach all regions and nations of the UK so working people in every community can feel the benefits.”

“The almost GBP 6 billion in new investment and export wins announced today will deliver thousands of jobs and show the strength of our partnership with India as we ensure the UK is the best place in the world to invest and do business,” Reynolds said.

Trade Boost and Economic Projections

New analysis released with the FTA indicates that every UK region will benefit from an estimated GBP 4.8 billion annual increase to GDP in the long term. Key sectors include manufacturing, with tariff cuts on aerospace (11 per cent to 0), automotives (110 per cent down to 10 per cent under a quota), and electrical machinery (22 per cent reduced).

Tariff cuts and reduced regulatory barriers are projected to increase UK exports to India by nearly 60 per cent in the long run, equating to an additional GBP 15.7 billion in exports by 2040. The FTA is forecast to boost bilateral trade by 39 per cent, adding GBP 25.5 billion annually when compared to projected trade levels without the agreement.

The clean energy industry will gain “brand new, unprecedented access” to India’s procurement market as the country transitions to renewables. The DBT noted, “For financial and professional business services, locked in access will offer certainty to expand in India’s growing market and measures such as binding India’s foreign investment cap for the insurance sector, ensuring UK financial services companies are treated on an equal footing with domestic suppliers.”

Meanwhile, 26 British companies have secured new business in India, with Airbus and Rolls-Royce preparing to deliver Airbus aircraft, over half of which will use Rolls-Royce engines.

During the talks, both nations will also agree to strengthen cooperation in tackling corruption, serious fraud, organised crime and irregular migration through enhanced intelligence sharing and operational collaboration. 

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