British food and drink exporters have welcomed a significant trade agreement between the UK and India, announced on Tuesday following extensive negotiations. This "historic" deal, described as the UK's most substantial bilateral agreement since leaving the EU, aims to facilitate easier exports of popular UK goods, notably whisky and lamb, to India's growing economy.

The agreement is expected to reduce Indian tariffs on key UK products, with reductions applicable to 90% of tariff lines over the coming years. Specifically, tariffs on whisky and gin will decrease from the current 150% to 75%, and further to 40% by the tenth year. Other products benefiting from this trade agreement include soft drinks, which will see tariffs drop from 33% to zero after a seven-year period, alongside immediate reductions for lamb imports.

The UK's Department for Business & Trade has projected that the agreement could boost bilateral trade by £25.5 billion annually by 2040, contributing approximately £4.8 billion to the UK's GDP and increasing wages by £2.2 billion each year in the long term. The deal was hailed by Prime Minister Keir Starmer as a major victory, particularly as global trade remains uncertain due to various geopolitical challenges.

Trade and Business Secretary Jonathan Reynolds noted the deal’s importance, saying that a pragmatic approach to global trade providing stability is essential in times of uncertainty. He emphasised the vast benefits for UK businesses across a range of sectors.

Last year, trade between the UK and India totalled £41 billion, with projections indicating that the tariff cuts could save UK exporters over £400 million immediately, potentially rising to around £900 million after a decade.

The Food and Drink Federation's CEO, Karen Betts, stressed that the deal represents a considerable opportunity for British food manufacturers, who exported nearly £300 million worth of goods to India in 2024. She highlighted that it would also strengthen supply chain resilience through greater access to Indian ingredients.

The Scotch Whisky Association's CEO, Mark Kent, described the reduction in whisky tariffs as a transformative opportunity, predicting a £1 billion increase in exports to India over five years and the creation of 1,200 jobs in the UK's whisky sector. Chivas Brothers, a key player in the industry, expects that the deal will solidify their existing investments, which include substantial production facilities in India and Scotland.

Drinks giant Diageo, already one of the largest spirits enterprises in India, referred to the trade agreement as a significant achievement for both countries’ leaders. CEO Debra Crew affirmed that it would fuel jobs and investment in both markets.

Small and medium-sized enterprises stand to benefit as the agreement simplifies market entry into India. David Hill, Managing Director of chocolate and confectionery maker Cocoda, pointed out that removing existing high import duties would be beneficial, though he also noted the importance of alleviating stringent customs regulations.

The meat industry has also expressed optimism, with the Association of Independent Meat Suppliers highlighting the potential for UK lamb products in India’s rapidly growing middle class and among its substantial Muslim population. Tony Goodger, the association's head of communications, indicated they would seek further clarification on whether other products, such as pork, might see similar tariff reductions.

The Institute for Public Policy Research described the agreement as indicative of Britain's strategic approach to international relations amidst ongoing global tensions, further reinforcing the notion that UK ministers are navigating the trade landscape effectively.