Reduced tariffs on whisky and gin as UK and India strike ‘historic’ trade deal
The UK and India have struck an “ambitious” trade deal that will slash tariffs on products such as whisky and gin.
The agreement will also see Indian tariffs cut on cosmetics and medical devices and will deliver a £4.8bn boost to the UK economy, according to the government.
It is also expected to increase bilateral trade by £25.5bn, UK GDP by £4.8bn and wages by £2.2bn each year in the long term.
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The news will be a welcome boost for the government following poor local election results, which saw Labour lose the Runcorn by-election and control of Doncaster Council to a resurgent Reform UK.
What will also be touted as a victory for Downing Street is the fact the government managed to strike a deal with India before the White House.
Speaking to reporters on Tuesday, Sir Keir Starmer hailed the “historic day for the United Kingdom and for India”.
“This is the biggest trade deal that we, the UK, have done since we left the EU,” the prime minister said.
What trade-offs are in the ‘historic’ deal with India?
This is the most significant trade deal Britain has negotiated since Brexit. It has been three years in the making with round the clock negotiations taking place in recent days.
Britain and India were coming from very different starting points. India’s economy is notoriously protectionist, with average tariff rates floating at around 130%. The UK, by comparison, is a very open economy. Our tariff rates hover around 5%. It means there were many prizes on offer for UK exporters, who are eyeing up a rapidly growing economy with increasingly powerful consumers.
The government will point to considerable concessions on 90% of tariff lines, 85% of them will go down to zero within the decade. It includes wins on whisky, which within ten years will be halved from the current 150%. No other country has managed to get India to move on that.
Of course there are trade-offs involved. The UK has agreed to lower tariffs on Indian textiles and apparel- a big employer in India. It will also make it easier for Indian professionals to come to the UK, something the Indians have been pushing hard on. However, there will be no formal changes to immigration policy.
Both countries have also refused to budge on certain industries. The UK has not lowered tariffs on milled rice, out of fear it could decimate native industries. The same applies to dairy for the Indians. Both sides have agreed quotas on cars for the same reason.
The Indians were pushing for an exemption for its high emission industries from the UK’s upcoming carbon tax. It is understood that will not happen.
“And it’s the most ambitious trade deal that India has ever done. And this will be measured in billions of pounds into our economy and jobs across the whole of the United Kingdom.
“So it is a really important, significant day. “
In a post on X, Indian Prime Minister Narendra Modi also welcomed the agreement as a “historic milestone” and added: “I look forward to welcoming PM Starmer to India soon.”
Negotiations for the deal relaunched in March after stalling under the Tory government over issues including trade standards and the relaxation of visa rules for Indian workers.
Overall, 90% of tariff lines will be reduced under the deal, with 85% of those becoming fully tariff-free within a decade.
Whisky and gin tariffs will be halved from 150% to 75% before falling to 40% by year ten of the deal, while automotive tariffs will go from more than 100% to 10% under a quota, the Department for Business and Trade (DBT) said.
For Indian consumers, there will be reduced tariffs on cosmetics, aerospace, lamb, medical devices, salmon, electrical machinery, soft drinks, chocolate and biscuits.
Meanwhile, British shoppers could see cheaper prices and more choice on products including clothes, footwear, and food products including frozen prawns as the UK liberalises tariffs.
India’s trade ministry said that under the deal, 99% of Indian exports will benefit from zero duty, Britain will remove a tariff on textile imports and Indian employees working in the UK will be exempt from social security payments for three years.
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Shadow trade secretary Andrew Griffith added: “It’s good to see the government recognise that reducing cost and burdens on businesses in international trade is a good thing, and that thanks to Brexit we can do.
“But it would be even better if they would apply the same reasoning to our domestic economy, where they remain intent on raising taxes, energy costs and regulatory burdens.”
The news was also welcomed by business group the British Chamber of Commerce, which said it was a “welcome lift for our exporters”.
William Bain, head of trade policy, said: ”Against the backdrop of mounting trade uncertainty across the globe, these tariff reductions will be a big relief. Products from Scotch whisky to clothing will benefit and this will give UK companies exporting to India a clear edge on increasing sales.
“The proposals for a follow-up investment treaty will also provide a solid platform to grow manufacturing and other sectors in our two economies.”
To the sound of mournful chants and the slow beat of drums, they march, whipping their backs with metal flails.
It is an ancient ceremony going back almost 14 centuries – the Shia commemoration of Ashura.
But this year in particular has poignant significance for Iranians.
The devout remember the betrayal and death of the Imam Hussein as if it happened yesterday.
Iranians gather ahead of Ashura
We filmed men and women weep as they worshipped at the Imamzadeh Saleh Shrine in northern Tehran.
The grandson of the Prophet Muhammad was killed by the armies of the Caliph Yazid in the seventh century Battle of Karbala.
Shia Muslims mark the anniversary every year and reflect on the virtue it celebrates – of resistance against oppression and injustice. But more so than ever this year, in the wake of Israel and America’s attacks on their country.
The story is one of prevailing over adversity and deception. A sense of betrayal is keenly felt here by people and officials.
Men and women weeped as they worshipped at the Imamzadeh Saleh Shrine
Many Iranians believe they were lured into pursuing diplomacy as part of a ruse by the US.
Iran believed it was making diplomatic progress in talks with America, which it hoped could lead to a deal. Then Israel launched its attacks and, instead of condemning them, the US joined in.
“Death to Israel” chants resounded outside the mosque in skies that for 12 days were filled with the sounds of Israeli jets.
There is a renewed sense of defiance here.
One man told us: “The lesson to be learned from Hussein is not to give in to oppression, even if it is the most powerful force in the world.”
‘I don’t think about Trump. Nobody likes him,’ one woman tells Sky News
A woman was dismissive about the US president.
“I don’t think about Trump. Nobody likes him. He always wants to attack too many countries.”
Pictures on billboards nearby link Imam Hussein’s story and current events. They show the seventh century imam on horseback alongside images of modern missiles and drones from the present day.
Other huge signs remember the dead. Iran says almost 1,000 people were killed in the strikes, many of them women and children.
Officially Iran is projecting defiance, but not closing the door to diplomacy.
Government spokeswoman Dr Fatemeh Mohajerani told Sky News that Israel should not even think about attacking again.
“We are very strong in defence, and as state officials have announced, this time Israel will receive an even stronger response compared to previous times. We hope that Israel will not make such a mistake.”
Dr Fatemeh Mohajerani said it would be a mistake for Israel to attack again
But there is also a hint of conciliation. Senior Iranian officials have told Sky News back-channel efforts are under way to explore new talks with the US.
Israel had hoped its attacks could topple the Iranian leadership. Those hopes proved unfounded. The government is in control here.
For many Iranians it seems quite the opposite happened – the 12-day war has brought them closer together.
World
Two security workers injured after grenades thrown at aid site, Gaza Humanitarian Foundation says
Two American security workers in Gaza were injured after grenades were thrown during food distribution in Khan Younis, the Gaza Humanitarian Foundation (GHF) has said.
In a statement, the US and Israeli-backed aid group said a targeted terrorist attack was carried out at one of its sites in southern Gaza on Saturday morning.
The two Americans injured “are receiving medical treatment and are in stable condition,” it said, adding that the delivery of aid was “otherwise successful” and that “no local aid workers or civilians were harmed”.
GHF didn’t say exactly when the incident happened but claimed Hamas was behind the attack, adding: “GHF has repeatedly warned of credible threats from Hamas, including explicit plans to target American personnel, Palestinian aid workers, and the civilians who rely on our sites for food.
“Today’s attack tragically affirms those warnings.”
Later, the aid group posted a picture on social media, which it said showed “fragments of a grenade packed with ball bearings” that was used in the attack.
Asked by Sky’s US partner network, NBC News, whether the two injured individuals were responsible for handing out aid or were responsible for providing security, GHF said they were “American security workers” and “two American veterans.”
The aid group did not provide specific evidence that Hamas was behind the attack.
The US and Israeli-backed group has been primarily responsible for aid distribution since Israel lifted its 11-week blockade of the Gaza Strip in May.
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It comes after Sky News analysis showed GHF aid distributions are associated with a significant increase in deaths in Gaza.
According to Gaza’s health ministry, 600 Palestinians have been killed while seeking aid from GHF sites as of 3 July, which charities and the UN have branded “death traps”.
Meanwhile, the Associated Press has reported that Israeli-backed American contractors guarding GHF aid centres in Gaza are using live ammunition and stun grenades.
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Contractors allege colleagues ‘fired on Palestinians’
GHF has vehemently denied the accusations, adding that it investigated AP’s allegations and found them to be “categorically false”.
Israel’s military added that it fires only warning shots and is investigating reports of civilian harm.
It denies deliberately shooting at any innocent civilians and says it’s examining how to reduce “friction with the population” in the areas surrounding the distribution centres.
Hamas has said it has “submitted its positive response” to the latest proposal for a ceasefire in Gaza to mediators.
The proposal for a 60-day ceasefire was presented by US President Donald Trump, who has been pushing hard for a deal to end the fighting in Gaza, with Israeli Prime Minister Benjamin Netanyahu set to visit the White House next week to discuss a deal.
Mr Trump said Israel had agreed to his proposed ceasefire terms, and he urged Hamas to accept the deal as well.
Hamas’ “positive” response to the proposal had slightly different wording on three issues around humanitarian aid, the status of the Israeli Defence Forces inside Gaza and the language around guarantees beyond the 60-day ceasefire, a source with knowledge of the negotiations revealed.
But the source told Sky News: “Things are looking good.”
A woman cries after her son was killed while on his way to an aid distribution centre. Pic: AP/Jehad Alshrafi
Hamas said it is “fully prepared to immediately enter into a round of negotiations regarding the mechanism for implementing this framework” without elaborating on what needed to be worked out in the proposal’s implementation.
The US said during the ceasefire it would “work with all parties to end the war”.
A Hamas official said on condition of anonymity that the truce could start as early as next week.
An Israeli army tank advances in the Gaza Strip, as seen from southern Israel. Pic: AP/Leo Correa
But he added that talks were needed first to establish how many Palestinian prisoners would be released in return for each freed Israeli hostage and to specify the amount of humanitarian aid that will be allowed to enter Gaza during the ceasefire.
He said negotiations on a permanent ceasefire and the full withdrawal of Israeli troops from Gaza in return for the release of the remaining hostages would start on the first day of the truce.
Hamas has been seeking guarantees that the 60-day ceasefire would lead to a total end to the nearly 21-month-old war, which caused previous rounds of negotiations to fail as Mr Netanyahu has insisted that Israel would continue fighting in Gaza to ensure the destruction of Hamas.
The Hamas official said that Mr Trump has guaranteed that the ceasefire will extend beyond 60 days if necessary to reach a peace deal, but there is no confirmation from the US of such a guarantee.
Speaking to journalists on Air Force One, Mr Trump welcomed Hamas’s “positive spirit” to the proposal, adding that there could be a ceasefire deal by next week.
Palestinians dispersing away from tear gas fired at an aid distribution site in Gaza. Pic: AP
A girl mourns the loss of her father, who was killed while heading to an aid distribution hub. Pic: AP/Jehad Alshrafi
Hamas also said it wants more aid to flow through the United Nations and other humanitarian agencies, which comes as the UN human rights officer said it recorded 613 Palestinians killed in Gaza within a month while trying to obtain aid.
Most of them were said to have been killed while trying to reach food distribution points by the controversial US- and Israeli-backed Gaza Humanitarian Foundation (GHF).
The spokeswoman for the UN human rights office, Ravina Shamdasani, said the agency was not able to attribute responsibility for the killings, but added that “it is clear that the Israeli military has shelled and shot at Palestinians trying to reach the distribution points” operated by GHF.
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Palestinians carry aid packages near the GHF distribution centre in Khan Younis. Pic: AP/Abdel Kareem Hana
Ms Shamdasani said that of the total tallied, 509 killings were “GHF-related”, meaning at or near its distribution sites.
The GHF accused the UN of taking its casualty figures “directly from the Hamas-controlled Gaza health ministry” and of trying “to falsely smear our effort”, which echoed statements to Sky News by the executive director of GHF, Johnnie Moore.
Mr Moore called the UN figures a “disinformation campaign” that is “meant to shut down our efforts” in the Gaza Strip.
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