UK and India Sign Trade Agreement: "Largest Deal Since UK's EU Exit"

UK Calls It a "Historic Agreement," India Says "Partnership Further Strengthened"
Will Trade Between Non-US Countries Gain Momentum Due to "Trump Tariffs"?

The United Kingdom has signed its largest trade agreement since Brexit (the withdrawal from the European Union) with India.

Keir Starmer, UK Prime Minister. Photo by EPA Yonhap News

On the 6th (local time), BBC and other media outlets reported that the UK and India had signed a trade agreement centered on major tariff reductions for key export items.

Under this agreement, India, known for its protectionist policies, will reduce tariffs on 90% of British products that were previously subject to duties. Of these, 85% will be fully exempt from tariffs (0%) within the next 10 years.

Specifically, tariffs on British gin and whisky will be reduced from 150% to 75%, and will be further lowered to 40% in the future. Tariffs on British cars imported to India will also drop sharply from 100% to 10% within quota limits. Tariffs on British cosmetics, electronics, lamb, medical devices, salmon, chocolate, confectionery, and aerospace industry products will also be reduced. The UK will lower tariffs on clothing, footwear, frozen shrimp, and jewelry imported from India.

The agreement also includes a provision exempting Indian workers in the UK from paying social security contributions for three years. This exemption will apply equally to British nationals working in India.

This agreement has drawn attention as it was signed at a time when the aggressive tariff policies of the Donald Trump administration in the United States are causing shocks to global trade. The Wall Street Journal (WSJ) reported, "The UK and India moved to make mutual trade easier as they faced US tariff barriers," and added, "Since President Trump was elected, countries around the world have been trying to increase trade with each other to mitigate the damage caused by US tariffs."

Sam Lowe, a partner at consulting firm Flint Global, also pointed out, "It is clear that President Trump served as a catalyst for the agreement between the UK and India."

The UK government assessed this agreement as the "largest and most economically significant" bilateral trade deal the UK has signed since leaving the European Union (EU) in 2020. The UK government also projected that the trade agreement will boost the economy by 4.8 billion pounds (8.8 trillion won) annually by 2040, and that trade between the two countries will increase by 25.5 billion pounds per year. Last year, the trade volume between the UK and India was 41 billion pounds.

UK Prime Minister Keir Starmer stated, "We have signed a historic agreement with India, one of the fastest-growing economies in the world," and added, "It will drive economic growth and bring benefits to the British people and businesses." Indian Prime Minister Narendra Modi also described the agreement on X (formerly Twitter) as "an ambitious and mutually beneficial historic milestone," and said, "This agreement will further strengthen the comprehensive and strategic partnership between our two countries and promote trade, investment, growth, job creation, and innovation in both economies."