After years of stalled discussions, Britain and India have successfully concluded a long-anticipated free trade agreement on May 6, a significant achievement partly influenced by global trade disruptions caused by President Donald Trump’s tariff policies. This agreement, involving the world’s fifth and sixth largest economies, had been in a state of uncertainty since negotiations commenced in early 2022. However, sources familiar with the talks informed Reuters that Trump’s assertive trade strategy, which led to widespread tariff conflicts, heightened the urgency for both nations to seek alternative partnerships and lessen their dependence on unstable U.S.-centric trade routes. The agreement aims to boost bilateral trade by $34 billion by 2040 and represents a historic opening of India’s previously protected sectors—such as automobiles and alcoholic beverages—to international competition. For instance, tariffs on British whisky will be immediately reduced from 150% to 75%, with a further decrease to 40% over the next decade. For Britain, this marks the most significant trade agreement since its departure from the European Union in 2020, providing British companies with improved access to Indian government contracts and facilitating business mobility for professionals. UK Prime Minister Keir Starmer described the agreement as a pivotal moment in a ‘new era for trade,’ while Indian Prime Minister Narendra Modi characterized it as ‘ambitious and mutually beneficial.’ The deal permits nearly all Indian exports—99%—to enter the UK without duties, while Britain will experience tariff reductions on 90% of its goods. Negotiations faced numerous delays due to political shifts in both countries, with the UK experiencing a turnover of four prime ministers and both nations undergoing elections since the talks began, as noted by Reuters. Nevertheless, in light of evolving global trade dynamics, the tariff era initiated by Trump acted as a catalyst—intensifying the focus on establishing resilient and diversified trade connections.
