India-UK Trade Deal: Tariffs on auto imports to be cut to 10%; whisky and gin tariffs down to 75%

India and the United Kingdom, on Tuesday, May 6, decided on a landmark free trade agreement. The deal between the world's fifth and sixth largest economies has been concluded after three years of stop-start negotiations.

The free trade agreement is expected to increase trade between the two countries by 25.5 billion pounds, and also be beneficial for the British economy and wages.

India will cut its automotive tariffs to 10 per cent from its current level of more than 100 per cent, as per the report. 

Apart from automotive tariffs on imports into India, the trade agreement also states that India will slash its import duties for UK goods, including whisky, gin, cosmetics and medical devices.

The import tariffs on whisky and gin are set to be halved to 75 per cent.

In exchange for India cutting its tariffs on imports, the United Kingdom has also agreed to cut tariffs on clothes, footwear and food products, including frozen prawns from India.

Trade deal talks

India and the UK's free trade agreement comes amid the ongoing tensions over US President Donald Trump's tariff hikes, which have resulted in a trade war between the United States and other world nations. The trade deal talks have been going on for a while; however, the negotiations were relaunched in February 2025, after Trump started threatening about the US import duty hikes.

“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,” said the UK PM Keir Starmer in an official statement cited by the news agency.

Starmer's Labour Party also said this deal with India marks the “biggest and most economically significant bilateral trade deal” since the UK left the European Union.

Indian Prime Minister Narendra Modi said that these landmark agreements with the UK will further deepen the trade and investment relations with the two nations.

“Delighted to speak with my friend PM @Keir_Starmer. In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention. These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon,” said Modi in his post on the social media platform X.