UK
IRE
AU
CA
US
ZA
As tariff barriers tumble, India’s trillion-dollar economy is ripe with possibilities
India is a shock to the system for British visitors: the noise, the hustle, the energy… and with the forging of a new trade agreement between the UK and India, SME owners from both countries are seeing a future bright with potential. This landmark deal, hailed as the “biggest and most economically significant” since leaving the EU*, slashes tariffs (import taxes) and promises to unlock a wealth of opportunities for your business.
Trade deal highlights
Tariff reduction on whisky and gin: Indian tariffs, currently at 150%, will be halved to 75% immediately and then gradually reduced to 40% over 10 years.
Tariff reduction on cars: Indian tariffs on UK cars will fall from over 100% to 10%, subject to a quota.
Duty-free access for Indian goods: The UK will eliminate tariffs on 99% of Indian goods, including textiles, clothing, footwear, and food products such as frozen prawns.
Tariff reduction on UK industrial goods: Tariffs on UK industrial goods exported to India will be reduced by an average of 5.2%.
Boost to bilateral trade: The deal is projected to increase bilateral trade between the UK and India by £25.5 billion annually by 2040.
Increase in UK exports to India: UK exports to India are predicted to grow by £15.7 billion (59.4%) by 2040.
Elimination of UK tariffs on Indian agri-food: The UK has eliminated tariffs on 95.5% of Indian agri-food exports.Significant savings on current trade: India’s tariff cuts on existing UK trade are estimated to save UK businesses £400 million in the first year, rising to £900 million after 10 years.
What the UK-India deal means for your business
This is great news for the UK’s SMEs for a number of reasons:
- Faster and cheaper trade: The agreement significantly reduces import taxes on goods including UK cosmetics, Scotch whisky, gin and cars. In turn, the UK is lowering taxes on Indian clothing, footwear, food products and jewellery. This translates to potentially lower costs for your business and a more competitive edge selling wares in the Indian market.
- Access to a booming market: India is projected to become the world’s third-largest economy, with a population 20 times the size of the UK. This deal opens the door to a vast and rapidly expanding consumer base, presenting unparalleled growth potential for UK SMEs.
- A boost for key UK industries: Sectors such as car manufacturing and whisky distilleries, which might be facing challenges elsewhere, are set to benefit greatly from reduced Indian tariffs. This creates a ripple effect, potentially leading to increased investment, job creation and higher profits for UK businesses.
- A geopolitical win: This agreement strengthens ties with a key ally, offering an alternative to reliance on other global powers and creating more stable and predictable trade relationships.
- A swift and decisive move: The UK government has acted quickly to secure this agreement, demonstrating its commitment to forging strong global partnerships and supporting UK businesses in a post-Brexit world.
The deal looks set to secure increased export opportunities for UK businesses, particularly those in automotive, cosmetics and food sectors as there will be an immediate and significant reduction in the cost of exporting to India.
As tariffs fall, consumers will see a greater choice of Indian products available in the UK, at more competitive prices. And by diversifying into the Indian market, UK businesses can reduce their reliance on other more volatile markets, leading to greater resilience.
Get started with Swoop
In short, this trade deal is a game-changer for UK SMEs. Is now is the time to explore the potential of the Indian market for your business? The UK and India are building a stronger economic partnership – so make sure you have the funding in place to make your mark in this exciting and dynamic new market. Register with Swoop to get started.
Swoop requires writers to use primary sources to support their work. These include white papers, government data, original reporting, and interviews with industry experts. We also reference original research from other reputable publishers where appropriate.
*UK and India agree trade deal after three years of talksIn short, this trade deal is a game-changer for UK SMEs. Is now is the time to explore the potential of the Indian market for your business? The UK and India are building a stronger economic partnership – so make sure you have the funding in place to make your mark in this exciting and dynamic new market. Register with Swoop to get started.
yet? Register here!