UK and India sign a ‘landmark’ trade agreement after years of tough negotiations

LONDON (AP) - Britain and India announced Tuesday that they have agreed on a long-stalled free trade agreement that will slash tariffs on Scotch whisky and scores of other products. The deal comes more than three years after negotiations started - and stalled - under a previous British government.

Indian Prime Minister Narendra Modi said on X that the deal was "ambitious and mutually beneficial."

The British government called it a "landmark." It said the deal will reduce Indian import taxes on whisky, cosmetics, medical goods, car and airplane parts and other goods from the U.K.

Whisky and gin tariffs will be halved from 150% to 75% before falling to 40% by year 10 of the deal. Automotive tariffs will fall from over 100% to 10% under a quota.

Britain said the deal is expected to increase bilateral trade by 25.5 billion pounds ($34 billion) a year "in the long run."

Mark Kent, chief executive of the Scotch Whisky Association, said the deal would be "transformational" for the industry. India is one of the world's largest whisky markets. He said it had "the potential to increase Scotch Whisky exports to India by 1 billion pounds over the next five years."

Formal talks that began in 2022 on a free trade agreement were hailed by then-Prime Minister Boris Johnson as a key goal after Britain's departure from the European Union in 2020. Johnson famously promised to have a deal done by Diwali in October of that year.

The two countries held 13 rounds of negotiations without a breakthrough before talks were suspended while both nations held 2024 general elections.

Modi was re-elected, and Britain replaced the Conservative government with one led by Prime Minister Keir Starmer's Labour Party.