Trump Tariffs Propel UK-India Free Trade Deal After Years Of Deadlock

India-West News Desk

NEW DELHI – After years of faltering negotiations, Britain and India have finalized a long-awaited free trade agreement on May 6, a breakthrough driven in part by global trade disruptions set off by President Donald Trump’s tariff policies.

The pact between the world’s fifth and sixth largest economies was stuck in limbo since talks began in early 2022. But sources close to the discussions told Reuters Trump’s aggressive trade agenda, which triggered widespread tariff tensions, accelerated the urgency for both countries to diversify partnerships and reduce reliance on volatile U.S.-centric trade routes.

The deal aims to increase bilateral trade by $34 billion by 2040 and marks a landmark opening of India’s protected sectors—such as automobiles and alcoholic beverages—to international competition. Tariffs on British whisky, for example, will be halved immediately from 150% to 75%, and further lowered to 40% over the next decade.

For Britain, it’s the most substantial trade deal since its exit from the European Union in 2020, offering British firms better access to Indian government contracts and streamlining business mobility for professionals. UK Prime Minister Keir Starmer called the agreement a turning point in a “new era for trade,” while Indian Prime Minister Narendra Modi hailed it as “ambitious and mutually beneficial.”

The agreement allows nearly all Indian exports—99%—to enter the UK duty-free, while Britain will see tariff reductions on 90% of its goods.

Negotiations had been repeatedly delayed due to political changes in both countries, with the UK cycling through four prime ministers and both nations holding elections since talks began, Reuters noted. But amid shifting global trade dynamics, the Trump-induced tariff era served as a wake-up call—sharpening the focus on building resilient, diversified trade links.