| Four years and as many British prime ministers later, the UK and India (our dear leader remains unchanged) finally clinched a trade deal this week that will boost British exports of scotch and Bentleys, and Indian exports of ready-made garments and skilled workers. The free-trade agreement will make steep reductions on over 90% of tariff lines between the two countries. It’s tempting to read the timing as showboating to Donald Trump, who is 100 days into his term and has no deal to show for it yet, or as Prime Ministers Modi and Keir Starmer seeking to insulate themselves from Trump’s trade war even as they negotiate deals with him. But, at $57 billion, India-UK annual trade is less than a third of India-US trade ($130 billion) and about an eighth of UK-US trade ($420 billion). It’s a free-trade agreement that will have modest results, said Ajay Srivastava, former Indian trade official and founder of the Global Trade Research Initiative. In these trade-war times, Srivastava, among India’s few experts who speaks candidly, is on speed dial for most journalists as he juggles answering amateur questions with writing expert op-eds in newspapers. Four-fifths of world trade happens outside FTAs, he said to me over the phone as I ask about winners in this deal. Besides, this FTA does not cover silver whereas scrap is already at zero tariff, he said of Britain’s top two exports to India. And there is no clarity yet on whether Britain will offer more professional visas for India’s top export — talent. The UK's Business Secretary Jonathan Reynolds put it at about 1,800 visas from an existing route for “chefs, musicians and yoga teachers,” reported the BBC. Srivastava is also concerned that India has agreed to give British firms, including those with just 20% UK content, guaranteed access to its $600-billion government procurement market and online platform which thus far has been the preserve of local companies, especially small- and medium-sized ones. In contrast, foreign firms get only a small slice of the UK’s government business. This opening up of India’s government procurement market first featured in the India-UAE FTA and soon other treaty countries will seek similar access, he said. “It's not supportive of Make in India.” But trade deals run counter to protectionism and there are some clear cross-border winners here. UK Gains Say cheers to cheaper British scotch whisky in India, the world’s biggest market for the tipple, as import duties are slated to fall from 150% to 75% and then 40% in year 10 of the deal. The same for gin too, which should excite me but I’ve developed a fondness for India’s Stranger and Sons (the guava version is yum!). India’s rich will save on their next Bentley, Rolls Royce or Jaguar Land Rover as the auto tariff drops from 100% to 10%, but under a quota — whether that’s a price or quantity threshold is not clear yet. (Srivastava said an expansive quota will be a ticking bomb for India’s auto industry as other trading partners, from Japan to the US, will ask for similar access.) Britain has also won lower tariffs on exports of medical devices, electrical machinery, aerospace, cosmetics, lamb, salmon, soft drinks, chocolate and biscuits, according to a government statement. While it’s not clear which Indians want to eat British chocolates (please email me your explanations), a surge in imports of medical devices may hurt the local industry that’s now also facing a 10% tariff on exports to the US. Though some India-made devices may find a bigger market in the UK thanks to lower duties there too.  Whisky barrels at the Glenturret Distillery in Crieff, UK. Whisky has been made here since 1763. Photographer: Emily Macinnes/Bloomberg India Gains India’s apparel industry expects to double exports to the UK in three years once a zero tariff puts it on par with competitors like Bangladesh, an industry council said in a statement. India is the fourth-largest supplier of garments to the UK with a 6.1% share versus China's 25.4%, Bangladesh at 19.9% and Turkey at 7.9%.
Indian gems and jewelry manufacturers also expect to double exports in two years to $2.5 billion, the industry association said, though the sector is a net importer from UK. Indian exports of textiles, marine products (shrimp!), leather, footwear, sports goods, toys, engineering goods, auto parts and engines, organic chemicals and digitally delivered services will also benefit, according to a government statement.
The UK has also agreed to exempt temporary Indian workers and their employers from paying social security contributions for a period of three years. The Indian government says this will make hiring Indian talent more competitive and create more job opportunities for Indians in the UK, but Reynolds told Bloomberg that the UK has such arrangements with a whole range of existing partners to ensure against double deductions.
I’m going to end this with a caveat. The full impact analysis will depend on the fine print — for instance the impact of the UK's IP protection clause on Indian generic medicines or India’s auto import quota limits — all of which could take a few months to become clear. Deal implementation may take up to a year.
But at least it’s close to done. And that’s the message here — that India is finally willing to lower its guard. President Trump are you listening? (Pssst! British apples didn’t make the cut.) | 
