UK signs trade deal with India

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These deals will drive jobs in high-growth sectors like aerospace, technology and advanced manufacturing – supporting engineers, technicians and supply chain workers, in every corner of the UK.

It comes as the Prime Minister met the Prime Minister of India, Narendra Modi, today for the signing of the landmark UK-India trade deal. New analysis shows communities across every region of the UK will benefit from its £4.8 billion increase to UK GDP each year.

The UK already imports £11 billion in goods from India but liberalised tariffs on Indian goods will make it easier and cheaper to buy their best products. For businesses, this could mean potential savings when importing components and materials used in areas such as advanced manufacturing or luxury and consumer goods.

Prime Minister Keir Starmer said: "Our landmark trade deal with India is a major win for Britain. It will create thousands of British jobs across the UK, unlock new opportunities for businesses and drive growth in every corner of the country, delivering on our Plan for Change.

"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."

India’s average tariff on UK products will drop from 15% to 3% which means British companies selling products to India will find it easier to sell to the Indian market.

Business and Trade Secretary Jonathan Reynolds said: "The billions brought to our economy from the trade deal signed today will reach all regions and nations of the UK so working people in every community can feel the benefits.

"The almost £6 billion in new investment and export wins announced today will deliver thousands of jobs and shows the strength of our partnership with India as we ensure the UK is the best place in the world to invest and do business.

"This government is proving time and again that we can deliver on our mission to grow the economy, put more money in pockets and boost living standards under our Plan for Change."

The two Prime Ministers have also signed a renewed Comprehensive and Strategic Partnership, which will see closer collaboration on defence, education, climate, technology and innovation. This comes exactly one year since the countries signed the landmark UK-India Technology Security Initiative, which sees joint work on telecoms security and unlocking investment across emerging technologies – telecoms, critical minerals, AI, quantum, health/bio tech, advanced materials and semiconductors.

The UK and India have also agreed to strengthen cooperation in tackling corruption, serious fraud, organised crime and irregular migration through enhanced intelligence sharing and operational collaboration. This includes committing to finalising a groundbreaking new criminal records sharing agreement, facilitating the exchange of criminal records to support criminal proceedings, maintain accurate watchlists and enable the enforcement of travel bans. These measures represent a significant step forward in joint efforts to combat organised immigration crime.

Aligned with the UK’s recent Industrial and Trade Strategies, the deal will support the sectors which drive the most growth for the economy. The UK’s large and varied manufacturing sectors will benefit from tariffs cut on aerospace (as high as 11% reduced to 0%), automotives (up to 110% down to 10% under a quota) and electrical machinery (from up to 22% down to either 0% of a 50% reduction).

A reduction in tariffs, combined with a reduction in regulatory barriers to trade between the UK and India are estimated to:

• Increase UK exports to India by nearly 60% in the long run – this is equivalent to an additional £15.7 billion of UK exports to India when applied to projections of future trade in 2040.
• Increase bilateral trade by nearly 39% in the long run, equivalent to £25.5 billion a year, when compared to 2040 projected levels of trade in the absence of an agreement

The clean energy industry will have brand new, unprecedented access to India’s vast procurement market as the country makes the switch to renewable energy and continues to see growing energy demand.  

For financial and professional business services, locked in access will offer certainty to expand in India’s growing market and measures such as binding India’s foreign investment cap for the insurance sector, ensuring UK financial services companies are treated on an equal footing with domestic suppliers. 

Meanwhile, 26 British companies have secured new business in India. Airbus & Rolls-Royce will soon begin delivering Airbus aircraft – with over half powered by Rolls-Royce engines – to major Indian airlines as part of around £5 billion worth of contracts recently agreed. These orders will help sustain hundreds of jobs across their respective sites in Filton, Broughton and Derby. 

Eighteen firms have confirmed new investment including Zerowatt Energy, AI powered energy intelligence platform is setting up its Global HQ in Leicester. The firm will invest £10 million and create 50 new jobs across Leicester, Manchester, Edinburgh and London over the next three years. 

International Aerospace Manufacturing Private Limited (IAMPL) – a joint-venture between Rolls-Royce plc and Hindustan Aeronautics Limited (HAL) – is expanding its manufacturing footprint with an investment of £30 million at its facility in Hosur, India. 

Tufan Erginbiligic, Rolls-Royce CEO, said: "India is an important market for our business, with over 90 years of partnership with Indian industry and the Indian Government. We welcome the provisions in this Free Trade Agreement, including those that bring closer alignment with international standards for trade in civil aerospace. These agreements will benefit Rolls-Royce and our customers, paving the way for future aerospace growth in India."

Security specialists Smiths Detection sees the overall revenue projection of over £50 million in over next three years in Indian aviation security, ports and borders and critical infrastructure market from various customers and is promoting the globally proven aviation security screening technologies like Checkpoint CT for the hand baggage screening at the airports in Indian market for highest standards of safety and security, passenger convenience and operational efficiency of airports.

Also, Aviation consultants ARUP, with expertise in airport master planning, design and specialist aviation services, has secured contracts worth £2 million from Indian airport operators for benchmarking, design standards and optimisation services.