A new UK-India is set to boost the UK economy by £4.8 billion, supporting 2,200 jobs through increased private investment and exports.
UK exporters will benefit from lower tariffs, allowing improved export opportunity for goods like automobiles, cosmetics and whisky.
The two countries will also share data on convicted criminals and suspected trafficking cases while removing barriers to returning immigrants who do not meet entry requirements.
Business and Trade Secretary Jonathan Reynolds said: “The billions brought to our economy from the trade deal signed today will reach all regions and nations of the UK so working people in every community can feel the benefits.”
Prime Minister Keir Starmer said: “Our landmark trade deal with India is a major win for Britian. It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country.
“We’re putting more money in the pockets of hardworking Brits and helping families with the cost of living, and we’re determined to go further and faster to grow the economy and raise living standards across the UK.”
The agreement will make it easier for companies in each country to set up in the other, which is expected to generate millions of pounds worth of private investment into metropolitan areas in India like Mumbai as well as the UK cities like Leicester, Manchester, London and Edinburgh.
A Double Contributions Convention (DCC) was also agreed. This allows workers sent abroad by their employers to continue paying into their home country’s social system for up to 36 months. This prevents duplicate payments and simplifies employment terms for companies.
The government clarified that the DCC does not change migration rules. Workers from India must still meet visa thresholds, pay fees, and receive sponsorship. The deal will not affect how the UK manages its borders.
Workers temporarily sent from India will pay into India’s national system, without gaining access to UK pensions or benefits. These measures are intended to keep systems balanced and avoid financial impact on the UK’s social contributions system.
Trade barriers will also be cut, with tariffs on the aerospace industry falling from 11 per cent to 0 per cent, and those on the automotive industry from 110 per cent to 10 per cent.
The manufacturing sector is also set to benefit with tariffs as low as 0 per cent on certain goods, down from 22 per cent.
The average Indian tariff on UK goods stands at 15 per cent, following the trade deal this will drop to three per cent.
Tufan Erginbiligic, Rolls-Royce CEO, said: “India is an important market for our business, with over 90 years of partnership with Indian industry and the Indian Government.
“We welcome the provisions in this Free Trade Agreement, including those that bring closer alignment with international standards for trade in civil aerospace.
“These agreements will benefit Rolls-Royce and our customers, paving the way for future aerospace growth in India.”
UK exports to India are expected to increase by 60 per cent by 2040, equivalent to £15.7 billion per year while total trade is expected to rise by 39 per cent, or £25.5 billion annually.
Parliament is expected to approve the agreement in the coming weeks. A full impact report will be published soon, and a long-term review will follow from the Office for Budget Responsibility.
Our full explainer of the trade deal can be found here.
Featured image via Salma Bashir / Shutterstock.
