What's in the UK-India trade deal?

Many grand adjectives have been used to describe the UK and India's trade deal and its impact on the respective economies.

The Indian government said it was "the most comprehensive free trade deal" it had ever entered into, with "an unprecedented achievement" for Indian migrant workers, while the UK has described it as a "huge economic win".

It's also the most significant trade deal Britain has negotiated since Brexit.

But what's actually in it?

The text hasn't been published with the agreement yet to be signed by leaders Sir Keir Starmer and Narendra Modi. It can take up to a year for such an agreement to receive parliamentary approval.

So, we have to take the word of the two governments.

Tax falls on UK and Indian goods

A key component is the reduction of tariffs.

India is a pretty protectionist state, with taxes around 130% on some goods it imports. As a result, it's the Indians making the steepest tariff reductions.

That means UK-made items are likely to be cheaper on Indian shelves and more competitive as a result.

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Goods to benefit from tariff falls include whisky and gin, which will see their import tax halved from 150% to 75% and then reduced to 40% by year 10 of the deal, the UK government said.

There'll be quotas on UK car exports to India and vice versa, but tariffs on those cars and parts will drop from more than 100% to 10%.

Indian consumers can expect to buy cheaper UK-manufactured cosmetics, medical devices, aerospace items, lamb, salmon, electrical machinery, soft drinks, chocolate, and biscuits as these items will be subject to cut-price tariffs under the deal, the UK Department for Business and Trade said.

The UK, too, will bring down its import taxes on things like textiles, though the typical rate is only 5%. Many tariffs on Indian imports to the UK, like textiles, will be wiped out altogether, while others will gradually be lowered.

India said the agreement will open up export opportunities for its sectors like marine products, leather, footwear, sports goods, toys, gems and jewellery, engineering goods, auto parts, and organic chemicals.

A brewing row

The major British concession is around new benefits for Indian workers in the UK.

Both UK workers in India and Indian workers in the UK will only pay tax in their country of origin rather than the one they're living in, under the agreement.

Indian workers transferred to the UK - and their employers - won't have to pay national insurance contributions for three years.

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While the UK government said there was no change to its immigration policy, the Indian government said the agreement "eases mobility" for professionals, including investors, people transferring to the UK within their company and their partners and children, and independent professionals like yoga instructors, musicians and chefs.

"Immense opportunities" for talented and skilled Indian youth will open up in the UK, the Indian government said.

What else?

Exporting to India from the UK will be "easier than ever before", the UK said, as customs processes become easier.

India agreed to release goods "as quickly as possible" after arriving at customs, to work with the UK on one streamlined portal for trade and to publish customs procedures and laws online in English.

New digital commitments will support electronic contracts and transactions, the UK government added.

"Enhanced" copyright protections for the creative industries will give UK exporters confidence under a commitment to protect works for at least 60 years.

For the first time ever with India there are chapters in the deal on anti-corruption, consumer protections, labour rights, gender, and development.

UK companies can also now bid to deliver Indian public sector services and projects for the first time.

(c) Sky News 2025: What's in the UK-India trade deal?