Prime minister Keir Starmer has hailed the impact of the new trade deal between the UK and India, which will create “thousands of jobs”, export wins of almost £6bn, and open up the Indian market for major food and drink suppliers.
Speaking on Thursday ahead of the deal’s signing alongside Indian prime minister Narendra Modi at Chequers, Starmer said it would create more than 2,200 British jobs as Indian firms expanded their operations in the UK, while the agreement also allowed for “new opportunities” for British companies to secure new business in India. A deal was first reached in May, following final talks in London.
New government analysis showed the UK would benefit from a £4.8bn increase to GDP every year, said No 10 Downing Street, with Starmer adding it would “unlock new opportunities for businesses and drive growth in every corner of the country, delivering on our Plan for Change”.
India’s average tariff on UK products will drop from 15% to 3%, meaning British companies selling products to India “from soft drinks and cosmetics to cars and medical devices will find it easier to sell to the Indian market”, Starmer added.
Whisky producers will benefit from tariffs slashed in half, reduced immediately from 150% to 75% and then dropped even further to 40% over the next 10 years, “giving the UK an advantage over international competitors in reaching the Indian market”, No 10 said.
Whisky sector set to see big benefits
Whisky giant Chivas Brothers said the trade deal “marks a significant step forward for the scotch whisky industry”.
Once ratified by UK and Indian governments, “this deal will unlock one of the world’s biggest whisky markets and enable us to open Chivas Brothers’ scotch whiskies up to a wider range of Indian consumers seeking premium, world-class spirits”, said its CEO Jean-Etienne Gourgues.
“The deal will support long-term investment and jobs in our distilleries in Speyside and our bottling plant at Kilmalid, and help deliver growth in both Scotland and India over the next decade. It’s clear that the future of scotch is global and we believe India will be a key partner in that journey.”
Diageo’s interim CEO Nik Jhangiani, meanwhile, said the agreement “marks a great moment for both scotch and Scotland, and we’ll be raising a glass of Johnnie Walker to all those who have worked so hard to get it secured”.
Other sectors that could benefit included dairy, with No 10 highlighting how Northern Ireland-based Lakeland Dairies Foodservice was now entering the Indian market with its flagship product Millac Gold, via its Indian Distribution partners Euro Foods Pvt. The projected export value for the next five years was in excess of £5m for the brand in India.
The Food & Drink Federation said it was “expecting the full details of the deal to be published imminently”, adding a small number of UK products would see “instant tariff elimination”, while a “targeted selection of UK food and drink products will see tariffs phased out or reduced in stages over the next five to 10 years”.
Meat, rice, eggs and sugar sectors to avoid import competition
On imports from India, the FDF said: “In order to protect sensitive UK sectors, the UK has offered no additional market access to Indian producers for the following products: sugar, milled rice, pork, chicken and eggs.”
Current duties will continue to apply for these products, while all other Indian products will be liberalised (at a 0% tariff), from when the agreement comes into force.
“We’re pleased to see the details of the new free trade agreement with India, with tariffs for iconic British products including chocolate, breakfast cereals and biscuits set to be phased out over the next decade,” said FDF head of trade George Hyde.
“We also welcome that this agreement protects the UK’s sugar and rice milling sectors, reflecting the vital role these industries play in boosting local economies,” he added.
“With exports of UK food and drink to India already worth nearly £300m annually, improved access to this growing market will help strengthen the competitiveness of our sector and help future-proof the nation’s food security. We look forward to working with government to help businesses make the most of this opportunity.”
The PM’s office said the deal would “increase UK exports [across all sectors] to India by nearly 60% in the long run – this is equivalent to an additional £15.7bn of UK exports to India when applied to projections of future trade in 2040”.
Bilateral trade would rise by almost 39%, equivalent to £25.5bn a year, when compared to 2040 projected levels of trade in the absence of an agreement, it added.
“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,” said business and trade secretary Jonathan Reynolds. “The almost £6bn in new investment and export wins announced today will deliver thousands of jobs and shows the strength of our partnership with India as we ensure the UK is the best place in the world to invest and do business.”
No comments yet