UK and India Trade Deal Announced – May 2025

The UK and India have come to a trade deal, allowing for the two countries to trade goods and services with one another more easily, and at a much cheaper price. The main goal of the deal is that of benefitting from one another’s economies.

What Has Been Agreed in the UK and India Trade Deal?

The UK has lowered taxes on the following goods imported from India:

• Clothing, textiles, and footwear.
• Food products.
• Jewellery and gemstones.
• Some brands of cars, which have not yet been confirmed.

India has slashed taxes on imported goods from the UK, including:

• Cosmetic products.
• Alcoholic and soft drinks e.g. Scotch and Gin. (Halved from 150% to 75%, falling to 40% after 10 years of the agreement)
• High value cars e.g. Aston Martin. (Fall from 100% to 10%)
• Food products e.g. confectionary and meats.
• Medical products and devices.
• Aerospace.
• Machinery.

Benefits of the Trade Deal

This deal will give British firms more say in services contracts in India. It has one year maximum to come into place, however, so no immediate changes will be seen. Trump’s tariffs had a negative effect on British alcohol and cars, so this deal softens the blow and diversifies the UK’s markets, making it less reliant on the USA.

In terms of the benefits this will have on the people of both nations, British businesses should see an increase in profits upon exporting more goods to India. This should result in higher profits, which in turn increases investment, hiring, and more corporate tax being paid. Indian consumers will also see more choice in goods from the UK.

This is the biggest post-Brexit trade deal the UK has signed, the third biggest overall after agreements with Japan and Australia. India is forecasted to be the third biggest economy in the world by 2030. With a population of 1.45 billion people, it makes sense to import more goods given the population’s current and potential buying power.

Consult KG Logistics

In conclusion, this trade deal with the UK and India should see the cost of important products, such as clothing and food, reduced substantially within the next year. India has the potential to be a dominant player in the world’s economy, and to get ahead of the curve is a big positive. Additionally, it diversifies the UK’s trade relations. The importance of this is exemplified by the fallout of Trump’s across-the-board tariff increases. This deal increases the UK’s trade portfolio, hopefully leading to the betterment of the UK’s economy after a rocky start for Keir Starmer and Labour’s tenure.

For professional expertise and advice in navigating these new changes, contact our team at KG Logistics today.