The UK Announces Major Trade Deals with India and the United States

by | May 9, 2025 | News & Updates

In a landmark week for global trade, the UK concluded long-anticipated trade agreements with India and the United States—cementing new commercial relationships with two of the world’s largest and most dynamic economies.

These deals are about more than just tariffs—they’re about realigning the UK’s global economic posture post-Brexit and opening fresh lanes of growth for businesses in all three countries.

UK-India Free Trade Agreement (FTA): Unlocking the Indo-Pacific Opportunity

Trade Relationship:

  • Bilateral trade between the UK and India exceeded £36 billion in 2023.
  • India is the UK’s 12th largest trading partner, and one of the fastest-growing economies in the world.
  • The UK is one of the largest investors in India, particularly in sectors like services, retail, financial services, and education.

Negotiation Journey:

  • Talks began in January 2022 under Boris Johnson’s government.
  • Over 14 rounds of negotiation occurred across three UK prime ministers and India’s 2024 general election cycle.
  • The deal was finally signed in May 2025, balancing geopolitical ambition with commercial pragmatism.

Key Provisions:

  • 99% of Indian exports to the UK will now enter tariff-free, including: Textiles and apparel Leather goods Gems and jewellery
  • UK exporters will benefit from reduced tariffs on: Chocolate, whisky, cheese Industrial goods, machinery Cosmetics and luxury products
  • Automotive tariffs on UK exports to India fall from 100% to 10% over a phased schedule.
  • While the deal includes cooperation on services and mobility, labour and environmental clauses are non-binding.

Opportunities:

For UK businesses:

  • Entry to a booming middle-class market of over 600 million consumers.
  • Stronger positioning in high-growth sectors: education, fintech, renewables, health-tech.
  • Better IP protections and transparency in consumer goods and pharmaceuticals.

For Indian exporters:

  • Price competitiveness in UK retail markets for fashion, consumer electronics, and processed foods.
  • Greater ease of doing business in the UK through customs simplification.
  • Boost to MSMEs and job creation in export-oriented sectors.

For both:

  • Framework for enhanced cooperation in clean tech, AI, and semiconductors under Indo-Pacific strategic goals.

UK-US Trade Deal: Sectoral, Strategic, and Symbolic

Trade Relationship:

  • The US is the UK’s largest single trading partner, with £260+ billion in annual trade.
  • Deep integration across defence, aerospace, finance, pharmaceuticals, and digital services.
  • Full FTA long stalled due to differences in food standards, digital regulation, and healthcare policy.

Negotiation Journey:

  • Talks began post-Brexit in 2020, stalled under the Biden administration, and were reenergized in 2025.
  • Signed under a second Trump administration and PM Keir Starmer’s leadership, the deal is sector-specific, not comprehensive.

Key Provisions:

  • UK car export tariffs to the US cut from 27.5% to 10%, up to 100,000 vehicles/year.
  • Removal of US tariffs on UK steel and aluminium.
  • UK pharma and aerospace components receive tariff-free access.
  • US granted expanded quotas for: 13,000 tonnes of beef 1.4 billion litres of ethanol
  • No consensus yet on digital services, data privacy, or AI regulation.

Opportunities:

For UK businesses:

  • Stronger competitive position in electric vehicles, biotech, aerospace, and premium goods.
  • Export cost reductions and improved integration into North American supply chains.
  • Pharma and healthcare firms benefit from smoother regulatory pathways.

For US businesses:

  • New access to UK markets for agribusiness, ethanol, and chemicals.
  • UK remains a strategic entry point to Europe via local subsidiaries.
  • Potential alignment on digital standards offers future upside for Big Tech and AI firms.

For both:

  • Conditions improved for VC, fintech, and tech scaleups to operate transatlantically.

Strategic Advice: How Companies Can Capitalize

For UK Firms:

  • Audit tariff savings and adjust pricing and margin strategies accordingly.
  • Use these FTAs to diversify export markets, reducing EU dependency.
  • Build local partnerships in India and the US to gain distribution and regulatory insights.
  • Reassess supply chains for resilience and regional optimization.

For Indian Firms:

  • Target the UK retail and grocery segments with cost-competitive goods.
  • Leverage tariff-free access to scale exports and raise brand visibility.
  • Seek UK-based warehousing, marketing, and distribution allies to streamline entry.

For US Firms:

  • Expand into the UK with simplified logistics and regulatory predictability.
  • Use the UK as a testing ground or springboard for broader European expansion.
  • Explore collaborative R&D in sectors like biotech, aerospace, and advanced materials.

Cross-border Ventures:

  • Joint ventures, tech transfers, and co-innovation hubs in areas like AI, clean energy, and cybersecurity can benefit from supportive trade frameworks.
  • Look out for government grants and export credits linked to FTA priorities.

These FTAs are not just diplomatic victories—they are commercial launchpads.

Whoever understands and acts first on the strategic advantages will lead the next wave of cross-border growth.