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India And U.K. Achieved What No One Else Could – And It Starts With Scotch & Supercars

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India And U.K. Achieved What No One Else Could – And It Starts With Scotch & Supercars


Contents
Scotch, Cars, Cosmetics – What Gets CheaperDuty-Free Exports, Open Market Access, Job Growth – What India GainsPeople, Services and Strategic FootingA Template for the Future

London/New Delhi: India and the United Kingdom signed a landmark Free Trade Agreement (FTA) on Thursday (July 24) that is poised to reshape the economic contours of a historic relationship. With Prime Minister Narendra Modi and British Prime Minister Keir Starmer standing shoulder to shoulder at the Chequers country estate, the two nations sealed a deal that cuts tariffs, opens markets and projects a shared ambition to double bilateral trade by 2030.

Finalised after three years of negotiations and signed by Indian Commerce Minister Piyush Goyal and his UK counterpart Jonathan Reynolds, the deal aims to lift trade between the world’s fifth- and sixth-largest economies by $34 billion annually.

“This agreement is a blueprint for shared prosperity,” said Modi, highlighting the breadth of sectors unlocked by the pact. From Scotch whisky to aerospace parts, from sarees to Jaguars, the trade corridors between India and the United Kingdom are now wide open.

Scotch, Cars, Cosmetics – What Gets Cheaper

The most visible win? A sharp slash in tariffs on Scotch whisky, one of Britain’s proudest exports. Duties will drop immediately from 150% to 75% and will further fall to 40% over the next decade. “This marks a great moment for both Scotch and Scotland,” said Nik Jhangiani, interim CEO of Diageo, adding, “We will be raising a glass of Johnnie Walker to all those who worked so hard to get this done.”

Cars are next in line. Tariffs on British-made vehicles will drop from as high as 110% to 10% within five years under a quota system, easing the path for brands like BMW, Nissan, Aston Martin and Jaguar Land Rover to expand their footprint in the Indian market.

On the flip side, Indian automakers will now gain access to the U.K. market for electric and hybrid vehicles, again under a quota system.

Other British products such as soft drinks, cosmetics, chocolates, biscuits and brandy will also see cheaper price tags in India. Tariffs on brandy and rum are being cut from 150% to 110% initially and to 75% over time.

For Indian consumers, this means British luxury and FMCG products will be significantly more affordable. For British companies, India just became a far less taxing place to do business.

Duty-Free Exports, Open Market Access, Job Growth – What India Gains

Minister of Commerce and Industry Piyush Goyal called the agreement “a new era for inclusive and gender-equitable growth”, pointing to duty-free access for 99% of Indian exports. That is worth nearly $23 billion in export opportunities, particularly for labour-intensive sectors.

A Moneycontrol analysis shows that nearly one-third of India’s exports to the UK could double by 2030. The gains will be steepest in:

1. Gems and Jewellery: Current U.K. imports from India stand at $941 million. The import duty drops from 4% to zero.

2. Engineering Goods: Exports valued at $4 billion to the United Kingdom will now expand due to elimination of 14% tariffs on electrical machinery.

3. Leather and Footwear: A complete phase-out of 16% duties is expected to increase India’s market share by 5%.

4. Textiles, Tea and Spices: Already strong sectors that could leap into higher market-share brackets.

5. Marine Products: Face duties up to 20% currently, expected to become more competitive.

“This is a transformative agreement. It eliminates tariffs across critical sectors, boosts MSMEs and opens up nearly 100% of trade between the two economies,” said Agneshwar Sen, Trade Policy Leader at EY India.

Presently small, toy exports are projected to hit $187 million by 2030. India’s processed food sector, which currently faces duties as high as 70%, will see those tariffs eliminated altogether.

People, Services and Strategic Footing

The deal brings services, people and strategic cooperation into the mix.

Indian professionals can now work in 35 U.K. sectors for 24 months, even without an office in Britain.

Thirty-six service sectors are open to Indian firms and freelancers, without needing to pass the U.K.’s ‘Economic Needs Test’.

Indian workers on temporary postings will no longer pay into U.K. social security, saving thousands in deductions.

British companies now gain access to India’s procurement markets in clean energy and insurance.

However, visas were not included in this round, and India was unable to secure relief from the U.K.’s Carbon Border Adjustment Mechanism – a policy that could lead to higher taxes on high-emission imports from 2027.

Still, the Confederation of British Industry hailed the deal as “a powerful signal in an era of rising protectionism”, while the Confederation of Indian Industry called it “a strong foundation for deeper market access”.

A Template for the Future

This is the UK’s biggest trade deal post-Brexit, though its projected annual boost to British Gross Domestic Product (GDP), 4.8 billion British pounds by 2040, is modest compared to the 2.6 trillion pound size of its economy.

For India, it marks a major leap forward. It is the country’s most comprehensive trade pact with a developed economy and possibly a template for future agreements with the European Union (EU) and others.

Pankaj Chadha of EEPC India summed it up like this, “The India-U.K. FTA is a timely breakthrough. It energises our engineering sector, opens new global value chains and strengthens MSMEs.”

As Modi left Chequers to meet King Charles, he carried a history and a future of economic ambition. And in both London and New Delhi, there was little doubt: this time, the handshake mattered. 





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