India and UK to sign major trade deal reducing duties on whisky, cars and textile exports

India and the United Kingdom are poised to finalize a landmark Free Trade Agreement (FTA) during Prime Minister Narendra Modi’s visit to London on July 23–24.

This pact, negotiated over three years, is expected to slash tariffs and significantly boost bilateral trade between the two countries.

Once signed, the agreement will remove duties on 99% of India’s exports to the UK, benefiting sectors such as textiles, footwear, leather, marine products, chemicals, engineering goods, toys and gems. Indian exporters stand to gain improved access to British markets, especially for labour-intensive goods.

In exchange, India will reduce tariffs on key UK exports. The import duty on Scotch whisky will drop from 150% to 75% immediately, and gradually reduce to 40% over a decade.

Import duties on cars will be brought down from over 100% to 10%, subject to a cap on the number of imported units. British exporters of cosmetics, chocolate, biscuits, medical devices and machinery are also expected to benefit.

The deal is projected to add over £25 billion to bilateral trade by 2040. It includes provisions on the temporary movement of professionals and waives UK social security contributions for certain Indian workers for up to three years.

The Indian Cabinet has reportedly approved the agreement, which is likely to open the UK’s electric vehicle market to Indian companies like Tata Motors and Mahindra Electric.

The UK, on the other hand, gains deeper access to India’s growing middle-class consumer base.

Analysts call this the UK’s most significant trade pact since Brexit, while Indian industry bodies expect a strong push for exports. Once ratified by both parliaments, the FTA could reshape trade dynamics between the two countries.