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The UK government has concluded a landmark free trade agreement with India, marking a major win for British exporters in the food and beverage industry. The deal is expected to slash Indian tariffs on key products such as whisky, chocolate, soft drinks and lamb, fueling optimism among British producers and providing greater access to one of the world’s fastest-growing consumer markets.

UK Prime Minister Keir Starmer commented: "We are now in a new era for trade and the economy. That means going further and faster to strengthen the UK’s economy, putting more money in working people’s pockets. Through this government’s stable and pragmatic leadership, the UK has become an attractive place to do business."

He continued: "Today we have agreed a landmark deal with India - one of the fastest growing economies in the world, which will grow the economy and deliver for British people and business. Strengthening our alliances and reducing trade barriers with economies around the world is part of our Plan for Change to deliver a stronger and more secure economy here at home."

Key features of the trade deal

Tariff reductions: India will reduce tariffs on 90% of tariff lines for UK exports, with 85% expected to become fully tariff-free within a decade.

Whisky tariff cuts: The current 150% tariff on imported whisky will be halved to 75%, with a target reduction to 40% over the next ten years.

Economic impact: The deal is anticipated to add £4.8 billion to the UK economy and create £2.2 billion in wages annually in the long run.

Specific benefits for F&B industry

Whisky and spirits:

The Scotch Whisky Association predicts that this deal could drive an additional £1 billion in whisky exports to India over the next five years, supporting around 1,200 jobs across the UK. William Wemyss, managing director of Wemyss Family Spirits, expressed the potential of the agreement: “India has long been seen as the single most exciting growth market for Scotch. It’s home to the largest population of whisky drinkers in the world, yet until now, punitive tariffs of 150% have held us back."

"The phased reduction of tariffs, from an immediate cut from 150% to 75%, with a target of 40% over the next decade, changes everything. It finally gives us a fairer footing to compete in a market that has been out of reach for too long. This deal could open the door to sustained investment, new partnerships, and long-term growth not just for our own business, but for distilleries across Scotland."

He continued: "It’s a positive and pragmatic step in the right direction, and one that we hope will be implemented swiftly and effectively. We welcome the agreement and remain committed to bringing our whisky to new audiences around the world, sharing a product that’s proudly Scottish but globally loved.”

Chocolate, soft drinks and snacks:

The agreement also reduces trade barriers for UK exports of chocolate, biscuits and soft drinks, categories that have long faced high tariffs in India. This will enhance competitiveness for British producers and improve affordability for Indian consumers.

Karen Betts, chief executive of the Food and Drink Federation, welcomed the deal: “We’re delighted the government has finalised its new Free Trade Agreement with India, which is testament to the hard work of the negotiating team. This is very welcome news for UK food and drink manufacturers, particularly for soft drinks, chocolates, biscuits, crispbreads and crackers, which will now all benefit from tariff-free access to one of the fastest growing markets in the world.”

Lamb and other products:

The agreement includes significant reductions in tariffs on frozen lamb, which has also faced high import duties in India. This change is expected to boost UK lamb exports, allowing British farmers to tap into a growing demand for high-quality meat products in the Indian market.

The reduction in tariffs will not only enhance the competitiveness of British lamb but will also provide Indian consumers with greater access to premium quality meat. This is particularly important as the Indian middle class continues to expand and seek diverse and high-quality food options.

Additionally, other products set to benefit from reduced tariffs include a variety of meats, seafood and processed foods. This opens up new opportunities for British producers to showcase their offerings in India, where there is a rising appetite for international cuisine.

Market opportunities

The UK government highlights that the deal will make UK exports more competitive, unlocking billions in new trade opportunities. Based on 2022 figures, India is expected to cut tariffs worth over £400 million when the deal takes effect, rising to approximately £900 million by year ten.

British shoppers are likely to benefit as well, with the UK set to liberalise its own tariffs. This move will lead to lower prices and greater choice on imported goods, including food products such as frozen prawns, as well as clothing and footwear.

The UK government's Business and Trade Secretary Jonathan Reynolds noted the broader implications of this agreement: "By striking a new trade deal with the fastest-growing economy in the world, we are delivering billions for the UK economy and wages every year and unlocking growth in every corner of the country, from advanced manufacturing in the North East to whisky distilleries in Scotland".

"In times of global uncertainty, a pragmatic approach to global trade that provides businesses and consumers with stability is more important than ever."