Who Wins and Loses as UK and India Slash Tariffs Together?

A historic free trade agreement has been signed between the United Kingdom and India after three years of negotiations. The deal promises to reshape trading landscapes and affect everything from whisky bottles to wardrobes.

As tariffs tumble, businesses in both countries are already strategizing to seize new opportunities. High streets, factories, and boardrooms across the UK and India will feel the effects.

Export Champions: Cars, Whisky, and Textiles Set for Gains

British carmakers and whisky distilleries anticipate significant growth. India's rapidly growing middle class can now afford luxury cars and spirits from the UK thanks to a dramatic reduction in tariffs.

Duties on whisky makers will immediately drop from 150% to 75%, and by 2035, they will drop to 40%, creating opportunities in a market already accustomed to consuming imported spirits.

Indian manufacturers, especially in textiles, footwear, gems, and jewelry, will gain easier access to UK markets. With lower tariffs, Indian exports ranging from saris to diamond rings will become more competitive and visible in British stores. The deal also benefits India’s seafood and engineering sectors, which are expected to see an uptick in UK demand.

Did you know?
Whisky tariffs for UK exports to India dropped from 150% to 75% immediately under the deal, the first major reduction in decades.

Workers: Hopes and Concerns

Proponents argue the deal could create over 2,200 new jobs in the UK by spurring Indian investment and growing British exports. Lower trade barriers encourage companies to hire, expand, and innovate.

But critics warn of risks. British unions and opposition parties fear that extended social security exemptions for Indian secondees and competition from lower-cost Indian goods could undercut domestic workers.

The government insists protections are in place, with reciprocal arrangements already in force for other countries and no tax advantage for hiring overseas workers.

Consumers: Cheaper Products and Greater Choices

Shoppers stand to benefit on both sides. UK consumers will see price drops on imported Indian goods; think affordable jewelry, shoes, high-quality textiles, and seafood.

For Indian consumers, British food (chocolates, biscuits, lamb, and salmon), gin, whisky, cosmetics, and medical devices are set to become more accessible.

The average tariff on UK exports to India drops from 15% to just 3%, so small- and medium-sized British companies could now find the Indian market within easier reach. This change could expand career prospects and consumer options alike.

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The Geopolitical Angle: Diplomacy and Competition

Beyond economics, the agreement signals closer diplomatic and security cooperation. The agreement has cemented intelligence sharing and joint efforts to combat organized crime and illegal migration. Leaders on both sides presented the deal as a symbol of shared prosperity and renewed partnership in the post-Brexit era.

However, the UK did not secure as much access as hoped to India’s lucrative financial and legal services sectors, and contentious talks on a mutual investment treaty and carbon-related taxes continue. These unresolved issues could influence final implementation and future relations.

Losers: Sectors Still Facing Barriers and Unresolved Questions

Not every sector is celebrating. UK firms in finance and legal services still face restricted market access, and some British manufacturers worry about increased competition from India’s efficient production hubs.

In India, industries susceptible to a surge of low-cost UK imports, like specific electronics, have expressed worries about competitive pressure.

Unions on both sides are watching closely for potential job displacement, especially in sensitive sectors like garments or machinery.

Forward Momentum Amid Skepticism

As ratification proceeds, expected to take up to a year, businesses face a time of uncertainty but rich opportunity. Whether the deal ultimately delivers widespread prosperity or heightens old disparities will depend on implementation, ongoing negotiations, and how businesses and governments adapt.

One thing is clear: the winners and losers of this historic deal will be determined not just by tariffs slashed today but by the next moves of industries, policymakers, and workers ready to seize the moment.