T4K3.news

UK signs trade deal with India worth £4.8 billion

Keir Starmer and Narendra Modi finalize a groundbreaking trade agreement after extensive talks.

July 23, 2025 at 09:30 PM

‘People said it would never be done’: UK and India trade agreement defies expectations

The UK and India finalize a trade deal that marks a shift towards openness and collaboration.

UK and India finalize unexpected trade agreement

Keir Starmer and Narendra Modi are set to sign a £4.8 billion trade agreement on Thursday, representing the end of three and a half years of negotiations. This deal enhances trade in sectors like cars and food between the UK and India, which has an average tariff rate of 13%, well above the UK's 1.5%. The agreement signals a reorientation of India's economy towards international cooperation after years of a protectionist approach. It also showcases the UK government's capabilities in establishing economic ties post-Brexit, marking a significant victory for Labour's trade secretary, Jonathan Reynolds, and his Indian counterpart, Piyush Goyal.

Key Takeaways

✔️

The trade deal amounts to £4.8 billion, enhancing UK-India economic relations.

✔️

India's average tariff is significantly higher than the UK's, indicating past protectionism.

✔️

Starmer's Labour government achieved this deal swiftly after taking office.

✔️

Negotiators fostered personal rapport to facilitate successful talks.

✔️

India's economy is shifting towards a more open trade stance.

✔️

The deal's implications extend beyond trade, addressing diplomatic relationships.

"People said this is a country that doesn’t like to do deals, it’s a very protectionist society."

A government official reflects on the successful trade agreement amid previous skepticism.

"Negotiating with India is not the same as negotiating with Australia or the USA."

A UK official emphasizes the distinct relationship-based approach required for negotiations with India.

"Things started to fall into place at such a pace."

A source describes the progress made during the final stages of negotiations.

This trade agreement demonstrates a significant shift in both countries' approaches to international trade. For the UK, it is an affirmation of the government's ability to pivot successfully post-Brexit. For India, it indicates a move away from decades of protectionism towards greater global integration. However, as negotiations continue on other agreements, the ongoing challenges around immigration and investment may prove to be barriers that hinder further collaboration. The relationship-based approach taken by negotiators has also highlighted a crucial aspect of diplomacy in trade talks—trust and personal connections saw these discussions succeed against forecasts of delays.