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India-UK trade deal takes effect, cutting tariffs for key exporters
The pact removes or reduces tariffs on 99% of Indian exports to the UK and 90% of UK imports into India, with expected GDP gains cited by both governments.
The India-UK free trade agreement took effect on Wednesday, with businesses preparing to benefit from tariff reductions expected to reshape cross-border trade, the BBC Business reports. Welspun Living, which makes Wimbledon championship towels, is among Indian manufacturers ramping up planning for UK buyers, including aligning logistics and trade documentation so shipments can qualify under the revised tariff structure from day one.
The agreement removes or reduces tariffs on 99% of Indian exports to the UK and 90% of UK imports into India. The BBC notes the UK government estimates the deal could raise UK GDP by 0.13%, or about £4.8 billion ($6.4 billion), and could increase India’s GDP by 0.06%, or about £5.1 billion per year in the long run.
The BBC also says the deal could help rebalance competition in home textiles, where India previously faced tariffs as other exporters benefited from duty-free access under the Developing Countries Trading Scheme. It cites an example that Pakistan’s share of UK home textile exports is around 55%, while India’s is 6% to 7%, a gap businesses say the new terms aim to address.
For UK alcohol and spirits firms, the BBC highlights a reduction in customs duties on Scotch whisky from 150% to 75% immediately, then gradually to 40% over 10 years. According to an import house executive cited by the outlet, the change is expected to increase momentum for imports, though actual gains will be clearer in the coming months.