India–UK Free Trade Deal Explained: What It Means For Whisky, Jobs, And Exports

<p>After three years, 14 rounds of negotiations, and intensive talks launched back in January 2022, India and the United Kingdom have finalised their Free Trade Agreement (FTA).</p>
<p>The deal, announced on May 6, 2025, is set to be formally signed tomorrow, July 24, 2025. Prime Minister Narendra Modi is currently on a two-day visit to the UK from July 23-24.&nbsp;</p>
<p>The trade pact is poised to reshape bilateral trade between the world&rsquo;s fifth- and sixth-largest economies&mdash;India and the UK, respectively.</p>
<h2><strong>A Deal Years in the Making</strong></h2>
<ul>
<li>Negotiation Timeline: 3 years, launched in January 2022</li>
<li>Total Rounds: 14</li>
</ul>
<p>This agreement represents one of India&rsquo;s most comprehensive trade efforts in recent years, reflecting growing ambitions to solidify its role in global commerce.</p>
<h2><strong>Bilateral Trade at a Glance</strong></h2>
<p>According to the Commerce Ministry:</p>
<ul>
<li>India&rsquo;s Exports to the UK (FY25): Rs. 1.23 lakh crore (Rs. 123,055 crore)</li>
<li>India&rsquo;s Imports from the UK: Rs. 72,882 crore</li>
<li>Total Trade Volume: Rs. 1.95 lakh crore (Rs. 195,937 crore)</li>
</ul>
<p>Each year, bilateral trade already exceeds &pound;25.5 billion (Rs. 2.95 lakh crore), and with tariff reductions kicking in, these figures are set to rise significantly.</p>
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<h2><strong>What&rsquo;s in It for India?</strong></h2>
<p>The FTA offers duty-free access for 99 per cent of Indian exports to the UK, opening new markets for:</p>
<ul>
<li>Leather, footwear, clothing</li>
<li>Gems &amp; jewellery, base metals</li>
<li>Sports goods, transport components</li>
<li>Chemicals, furniture, textiles, minerals</li>
</ul>
<p>Currently, these sectors attract duties ranging from 4&ndash;16 per cent in the UK. The removal of these levies will substantially increase the competitiveness of Indian goods.</p>
<p>Moreover, tariffs will be cut or eliminated on products like processed foods, animal goods, glassware, and even arms and ammunition.</p>
<h2><strong>Whisky, Cars, and a Taste of Britain in India</strong></h2>
<p>In a major concession from India, tariffs on premium British imports will be gradually slashed:</p>
<ul>
<li>Scotch whisky &amp; gin: Tariff cut from 150 per cent to 75 per cent initially, and to 40 per cent by year 10</li>
<li>UK autos (including luxury cars): Tariffs reduced from 100 per cent + to 10 per cent, under defined quotas</li>
<li>Indian imports of British whisky: Worth &pound;200 million annually (Rs. 2,310 crore)</li>
</ul>
<p>The reduction will notably benefit companies like Tata-JLR, and UK exporters of high-value consumer products.</p>
<h2><strong>Big Picture Gains: Sectoral and Strategic</strong></h2>
<p>The FTA encompasses more than just goods:</p>
<ul>
<li>Tariff elimination on 90 per cent of traded goods</li>
<li>India gains on 99 per cent of its export categories</li>
<li>UK companies get priority access under India&rsquo;s &lsquo;Make in India&rsquo; initiative</li>
<li>Provisions for professionals in IT, engineering, architecture, education, and creative industries</li>
<li>Mobility eased for skilled professionals like yoga instructors, chefs, musicians, and business visitors</li>
</ul>
<h2><strong>Projected Trade Boost</strong></h2>
<p>According to official estimates:</p>
<ul>
<li>UK exports to India could rise by 60 per cent (worth &pound;15.7 billion / Rs. 1.81 lakh crore)</li>
<li>Indian exports to UK to grow by 25 per cent (worth &pound;9.8 billion / Rs. 1.13 lakh crore)</li>
</ul>
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<h2><strong>Road Ahead: What&rsquo;s Next?</strong></h2>
<p>The agreement will be signed by Commerce Minister Piyush Goyal and his UK counterpart during the Prime Minister&rsquo;s visit. But before taking effect, the deal requires:</p>
<ul>
<li>&nbsp;Approval from the Indian Cabinet</li>
<li>Ratification by the UK Parliament</li>
</ul>
<p>Once cleared, implementation is expected to begin within a year.</p>
<p>India and the UK have also concluded a social security pact to avoid dual contributions for Indian professionals working in the UK temporarily. However, negotiations for a bilateral investment treaty are still ongoing.</p>
<p><strong><em>(Disclaimer: All the conversions are estimates, as exchange rate keeps fluctuating. Therefore, they are used to understand an idea of the actual figure and do not represent an exact data.)</em></strong></p>