A new UK-India trade deal is expected to deliver a £310 million boost to London’s economy, according to new analysis released this week.
The deal, described as the most comprehensive India has ever signed, forms part of the government’s broader “Plan for Change” and was officially signed following a meeting between UK Prime Minister and Indian Prime Minister Narendra Modi.
In addition to the local impact, the deal is forecast to add £4.8 billion to the UK’s GDP annually, and bring in nearly £6 billion in confirmed investment and export wins, creating over 2,200 jobs.
More than 1,100 London-based businesses exported £1.8 billion worth of goods to India last year. The deal is expected to lower tariffs, simplify customs, and reduce trade barriers – paving the way for further growth.
One area likely to benefit is the capital’s long-established gin industry, with tariffs on gin exports to India set to drop from 150% to 75%, and then further to 40% over the next decade.
Business and Trade Secretary Jonathan Reynolds said: “The millions brought to London each year from the deal we’ve signed with India will be keenly felt across local communities, whether that’s higher wages for workers, more choice for shoppers, or increased overseas sales for businesses.
“This government is proving time and again that we can deliver on our mission to grow the economy, put more money in pockets and boost living standards under our Plan for Change.”
Mayor of London Sadiq Khan also welcomed the agreement, saying: “I’m delighted that the Government has signed this historic trade deal with India, delivering a £310m boost for London’s economy and creating opportunities for business in the capital and across the UK.
“On the back of the recent economic deals agreed between the Government and the US and EU, there has never been a better time to invest in the capital.
“London is the leading destination for businesses looking to thrive and grow and I’ll continue to work with Ministers to create a fairer and more prosperous city for all Londoners.”
Workers in London are expected to benefit from a rise in wages, with an estimated £2.2 billion increase nationally, while consumers may see lower prices and greater choice on products such as clothing and food due to reduced tariffs on Indian imports.
For London-based businesses, the agreement offers cost savings when importing materials for manufacturing, fashion, luxury goods, and consumer products. Tariffs on Indian goods will fall from an average of 15% to just 3%, opening up easier access to a market expected to include over 250 million high-income consumers by 2050.
The deal is also set to bolster key sectors like insurance and banking. These services, which made up 59% of UK exports to India last year, could see an additional £1.7 billion in growth under the new agreement.
Rohan Malik, EY EMEIA and UK & Ireland Government & Public Sector Managing Partner, said: “Over the past decade, total trade value between the UK and India has more than doubled from £16.6bn to £40bn and this agreement will further strengthen the flourishing economic relationship between the two countries.
“Enhanced access to one of the world’s largest markets should offer considerable advantages for financial and professional services businesses, unlocking commercial opportunities and supporting growth across two strategically significant sectors of the UK economy.”
Chris Mitchell is the founder and editor of Harrow Online, Harrow’s leading local news platform.
He launched Harrow Online in 2010 as a Facebook page sharing local news and information. Since then, it has grown into a trusted source for breaking news, crime, council decisions, planning, transport, business and community stories across the borough.
Harrow Online reaches hundreds of thousands of readers each month and has a social media audience of more than 200,000 followers.
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