Starmer, Modi to sign £6bn UK-India trade deal

Indian Prime Minister, Narendra Modi is in the UK to finalise a landmark free trade agreement with Prime Minister Keir Starmer.

The deal worth £6 billion that promises to boost exports and create thousands of jobs.

The agreement will make UK goods such as cars and whisky cheaper to export to India, while reducing the cost of importing Indian textiles and jewellery into the UK.

It also includes a controversial clause extending national insurance exemptions for seconded workers from one to three years.

Critics have warned the deal could “undercut British workers”, but UK Business Secretary Jonathan Reynolds dismissed the concern as “completely wrong”.

He stressed that Indian workers would receive the same treatment already extended to 17 other countries, including the US, EU, and South Korea.

“I can categorically tell you that is not the case. There is no tax advantage for hiring an Indian worker over a British worker,” Reynolds said on BBC Breakfast. “You’d actually pay more for an Indian worker” because of additional visa and NHS surcharge costs, he added, insisting “no-one is being undercut.”

Signed after three years of negotiations, the deal is expected to create over 2,200 British jobs as Indian companies expand operations in the UK and British businesses secure new access to Indian markets.

Calling it “a major win for Britain”, Prime Minister Starmer said: “We’re putting more money in the pockets of hardworking Brits and helping families with the cost of living, and we’re determined to go further and faster to grow the economy and raise living standards across the UK.”

The government estimates the agreement will boost the UK economy by £4.8 billion annually. However, it will take at least a year to come into effect as it awaits parliamentary approval in both countries.

Under the agreement, average tariffs on UK exports to India will fall from 15% to 3%, with whisky duties cut immediately from 150% to 75% and dropping to 40% by 2035.

British exporters will also benefit from improved access to India’s advanced manufacturing sector, including electric and hybrid vehicles.

In return, Indian manufacturers will benefit from easier access to the UK market, and the two nations will collaborate more closely in key sectors such as defence, education, climate, and technology.

The agreement also includes a new plan to tackle illegal migration and enhance cooperation on organised crime and fraud. A forthcoming agreement on sharing criminal records will improve watchlists, help enforce travel bans, and aid court proceedings.

While the deal was hailed as “an unprecedented achievement” by the Indian government when it was agreed in May, talks continue over unresolved issues.

These include UK demands for greater access to India’s financial and legal services sectors, and India’s concern over Britain’s proposed tax on high-carbon imports.

Modi’s visit—his fourth to the UK since becoming prime minister in 2014—comes a year after he signed the UK-India Technology Security Initiative with Foreign Secretary David Lammy, boosting cooperation on telecom security and emerging tech.

Though the agreement has been largely welcomed, the opposition has taken aim at Labour’s economic policies. Conservative shadow business secretary Andrew Griffith credited the deal to the UK’s departure from the EU.

“This trade deal was only possible because of Brexit delivered by the Conservatives,” he said, calling it “a step in the right direction.”

Griffith added: “The irony should not be lost on anyone that any gains from this trade deal will be blown out of the water by [Deputy Prime Minister] Angela Rayner’s union charter, stifling business with red tape, the jobs tax and, come autumn, Rachel Reeves’ inevitable tax hikes that will punish Britain’s makers just to reward those who do not contribute.”

(BBC)

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