London
CNN
—
India and Britain struck a “landmark” trade deal Tuesday, the UK government said, marking progress on lowering and removing tariffs just as President Donald Trump is busy raising US import taxes to historic levels.
For weeks, Trump has said that at least one trade deal is imminent with one of the dozens of countries in active negotiations with the United States to avoid his punishing tariffs – with India among the most likely to reach such an agreement first.
The prospect of an agreement with any one major trading partner has boosted confidence in US financial markets and raised hopes that the world may avoid the worst impacts of America’s tariffs. But so far, no deal has emerged.
Instead, it’s the United Kingdom that has secured a trade deal with India.
The two nations’ agreement is “the biggest and most economically significant bilateral trade deal the UK has done since leaving the EU,” the UK Department for Business and Trade said in a press release.
As a result of the agreement, it noted, bilateral trade is expected to swell by £25.5 billion ($34.1 billion) per year in the long run. That would be a 60% increase from the 2024 level, based on UK government data.
India has agreed to reduce tariffs on a range of UK products, including whisky, medical devices, advanced machinery and lamb. And most of these levies will be removed altogether within a decade, according to the release.
In turn, the United Kingdom will lower tariffs on Indian goods, the business and trade department suggested, without providing details.
“British shoppers could see cheaper prices and more choice on products including clothes, footwear and food products, including frozen prawns, as (the) UK liberalizes tariffs,” the release said.
The Trump administration, for its part, has said India, Japan and South Korea will likely reach a trade deal with the US, but the weeks are rolling on with no deal in sight.
And the US has a tight deadline: Its so-called “reciprocal” tariffs are set to go into effect on July 8, when levies as high as 50% will start applying to dozens of nations. The Trump administration risks causing serious economic damage, which could quickly turn into a US and global recession, if it doesn’t hammer out any trade deals soon.
The UK’s latest agreement is not its first major trade deal with an Asian country. After leaving the European Union in 2020, Britain clinched an agreement with Japan later that year. That deal was set to increase trade between the two countries by about £15.2 billion ($20.3 billion), the UK government said at the time.
“We are now in a new era for trade and the economy,” UK Prime Minister Keir Starmer said Tuesday, commenting on the deal with India. “Strengthening our alliances and reducing trade barriers with economies around the world is part of our Plan for Change to deliver a stronger and more secure economy here at home.”
Emma Rowland, policy adviser for trade at the UK’s Institute of Directors, made a similar assessment.
“In light of recent trade wars and US tariff-related disruption, new partnerships that encourage free and open trade should be celebrated,” she said. “The UK-India trade agreement is a win for the UK, removing barriers and business costs for British firms trading with the fourth-largest global economy.”
CNN’s Robert North, Anna Cooban and David Goldman contributed reporting.
