NEWS
UK-INDIA FREE TRADE DEAL CUTS SCOTCH TARIFFS TO 75% & THEN TO 40% IN A DECADE
By Siulan Law Mathews DipWSET
24-7-2025
Source: Doubao
India and UK signed a landmark free trade agreement on Thursday during a visit by Indian Prime Minister Narendra Modi. The deal will initially halve the Indian tariff on Scotch and British gin to 75 percent from 150 percent before falling to 40 percent by the tenth year of the deal.
The agreement aims to increase bilateral trade by a further £25.5 billion (USD34 billion) by 2040. It will take effect after the British parliament and India's federal cabinet approve it, likely within a year.
The two countries concluded talks on the long-coveted free trade pact in May after three years of negotiations, with both sides hastening efforts to clinch a deal in the face of tariff turmoil sparked by U.S. President Donald Trump.
"Our landmark trade deal with India is a major win for Britain. It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth," said British Prime Minister Keir Starmer.
“The reduction of the current 150 percent tariff on Scotch whisky will be transformational for the industry and has the potential to increase Scotch whisky exports to India by £1billion over the next five years, creating 1,200 jobs across the UK, ” said Mark Kent, chief executive of the Scotch Whisky Association.
On cars, India will cut duties to 10 percent from over 100 percent under a quota system that will be gradually liberalised.
In return, Indian manufacturers are expected to gain access to the UK market for electric and hybrid vehicles, also under a quota system, Indian commerce ministry officials said.
The ministry has said 99 percent of Indian exports to Britain would benefit from zero duties under the deal, including textiles, while Britain will see reductions on 90 percent of its tariff lines.
The deal will also facilitate easier access for temporary business visitors, though visas are not covered.
Britain and India also agreed to ensure workers no longer have to make social security contributions in both India and Britain during temporary postings in the other country.
Under the trade deal, British firms will be able to access India's procurement market for projects in sectors such as clean energy, and it also covers services sectors such as insurance.
(the writer can be contacted at: info@thewinechronicle.com)
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