UK and India Forge Historic Trade Agreement

LONDON (AP) — In a significant diplomatic achievement, the prime ministers of Britain and India finalized a comprehensive trade agreement on Thursday. The deal, designed to bolster economic ties between the two nations, will reduce tariffs on key products such as Scotch whisky, English gin, as well as Indian food and spices exported to the U.K.

Milestone Meeting at Chequers

Keir Starmer, the U.K. Prime Minister, and Narendra Modi, his Indian counterpart, convened at Chequers—the official residence of the British leader located just outside London. This meeting culminated in the formal signing of the agreement by the U.K. and Indian trade ministers, Jonathan Reynolds and Piyush Goyal.

Significance of the Agreement

Starmer hailed the deal as “the biggest and most economically significant trade deal” Britain has executed since exiting the European Union in 2020. Modi echoed this sentiment, affirming that it marks “a historic day in our bilateral relations.”

Expanding Economic Ties

In addition to the trade agreement, both nations unveiled nearly £6 billion ($8 billion) in supplementary trade and investment initiatives across various sectors, including artificial intelligence (AI), aerospace, and dairy products. They also committed to collaborating more closely on critical issues such as defense, migration, climate, and health.

A Long Journey to Agreement

The trade pact comes after more than three years of negotiation, which faced multiple delays under the previous Conservative administration. Initially announced in May, it still awaits ratification by the British Parliament.

Tariff Reductions and Economic Impact

The U.K. government indicated that the agreement would decrease India’s average tariff on British goods from 15% to just 3%. Notably, tariffs on whisky and gin will be halved from 150% to 75%, eventually tapering off to 40% by the tenth year of the agreement. Automotive tariffs are also set to drop from over 100% to 10% under a quota.

According to the U.K. government, the deal is projected to boost bilateral trade by £25.5 billion ($35 billion) annually by 2040, contributing nearly £5 billion ($6.8 billion) to the British economy each year. Meanwhile, India’s Trade Ministry has stated that 99% of Indian exports will incur no import duty under the agreement, impacting a range of products from clothing to food.

The Road Ahead

Formal discussions began in 2022 regarding a free trade agreement, a goal initially championed by former Prime Minister Boris Johnson. However, the negotiations met with prolonged delays, eventually stalling while both nations prepared for general elections in 2024. Following these elections, Modi was re-elected, and the British government transitioned to a new administration led by Starmer’s center-left Labour Party.

A Cultural Connection

With nearly 2 million people in the U.K. tracing their roots back to India, the historical ties between the two nations remain strong. Starmer reflected on these connections, emphasizing the importance of fostering a modern and ambitious partnership focused on long-term goals.

A Metaphor in Cricket

As England and India engage in a cricket test series, Modi remarked that the sport serves as “a great metaphor for our partnership.” He noted, “There may be a swing and a miss at times, but we always play with a straight bat. We are committed to building a high-scoring, solid partnership.”