NEW DELHI: Britain and India clinched a long-coveted free trade pact on Tuesday after tariff turmoil sparked by US President Donald Trump forced the two sides to hasten efforts to increase their trade in whisky, cars and food.

The deal, between the world’s fifth and sixth largest economies, has been concluded after three years of stop-start negotiations and aims to increase bilateral trade by a further 25.5 billion pounds ($34 billion) by 2040.

Indian Prime Minister Narendra Modi said the trade deal was “ambitious and mutually beneficial”. British Prime Minister Keir Starmer said the strengthened alliance would reduce trade barriers in a “new era for trade”.

Trump’s tariffs have prompted countries across the world to redouble efforts to seek new trade partners and people familiar with the UK-India talks said the turmoil had sharpened the focus to get a deal done. The deal, which will lower tariffs on goods such as whisky, allow British firms to compete for Indian contracts and Indian workers to more easily work in Britain, is significant for both economies. It marks India opening up its long-guarded markets, including automobiles.

It also represents Britain’s most significant trade deal since it left the EU in 2020, though the projected boost to British economic output from the deal, of 4.8 billion pounds a year by 2040, is small compared to the country’s gross domestic product of 2.6 trillion pounds in 2024.

Published in Dawn, May 7th, 2025