UK Prime Minister Sir Keir Starmer officially participated in his first G20 Summit, held in Rio de Janeiro on November 18, 2024, where he engaged in crucial discussions, including a notable bilateral meeting with Indian Prime Minister Narendra Modi. This summit marks a significant moment for Starmer as he embarks on international diplomacy.
In related developments, the UK and India have solidified a bilateral trade agreement aimed at enhancing economic cooperation. The pact involves significant reductions in tariffs for key exports, such as UK whisky and automobiles. Specifically, the agreement outlines a plan for India to gradually lower import taxes from the UK, with an ambition to eliminate tariffs on the majority of goods over the next decade. Notably, whisky and gin tariffs, which are currently as high as 150%, will be halved to 75% and further reduced to 40% while automotive tariffs are expected to drop from over 100% to 10%.
The British government projects that this trade agreement will boost bilateral trade by £25.5 billion, bringing the total trade between the two nations to £42.6 billion by the end of 2024, marking an 8.3% increase from the previous year. However, the UK faces a trade deficit of £8.4 billion with India, making the South Asian nation its 11th-largest trading partner.
The trade issue comes amid escalating global trade tensions influenced by U.S. policies. As former President Donald Trump raised tariffs globally, the UK seeks to strengthen its ties with key nations like India, moving towards a more interconnected economic relationship.
This progressive trade agreement represents a hopeful step towards revitalizing economic collaboration and addresses existing trade imbalances while fostering stronger UK-India relations in a challenging global landscape. The potential increase in trade could provide opportunities for businesses and contribute positively to both economies.