UK, India strike trade deal amid US tariff blitz

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AFP May 07, 2025

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LONDON:

Britain on Tuesday struck a free trade agreement with India, its biggest such deal since leaving the European Union, after negotiations relaunched in February following US tariff threats.

Britain has sought to bolster trade ties across the world since it left the EU at the start of the decade under Brexit, a need that became more pressing after the United States unleashed tariffs that risk causing weaker economic growth.

"Today we have agreed a landmark deal with India -- one of the fastest-growing economies in the world, which will grow the economy and deliver for British people and business," UK Prime Minister Keir Starmer said in a statement.

His Labour government said it is "the biggest and most economically significant bilateral trade deal the UK has done since leaving the EU".

India's Prime Minister Narendra Modi described the deal as "ambitious and mutually" beneficial.

The pact will help "catalyse trade, investment, growth, job creation, and innovation in both our economies", Modi said in a post on social media platform X.

His office said in a statement that the deal will "unlock new potential for the two nations to jointly develop products and services for global markets".

It added that Modi had invited Starmer to visit India at an unspecified date. The accord will slash tariffs on imports of UK goods into India, including whisky, cosmetics and medical devices.

Whisky and gin tariffs will be halved to 75 percent, while automotive tariffs will be slashed from more than 100 percent to 10 percent. In exchange, the UK will cut tariffs on imports of clothes, footwear and food products, including frozen prawns, from India.

The deal comes after US President Donald Trump hiked tariffs on trading partners and launched sector-specific levies on steel, aluminium and cars.

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