As India and Britain look set to sign a free trade agreement (FTA), some industries are disappointed and want a level playing field.
The Indian cabinet has given its consent to the deal as Prime Minister Narendra Modi is headed to the UK to sign it with his British counterpart Sir Keir Starmer.
The pact, formally called a comprehensive economic and trade agreement, will now have to be ratified by the British parliament, which could take several months.
For Britain, this is the biggest and most economically significant bilateral trade deal since it left the European Union. The government says the deal is expected to add £4.8bn to the economy and £2.2bn in wages every year in the long run.
Britain is the sixth-largest investor in India, with cumulative investments of around $36bn. There are at least 1,000 Indian companies operating in the country, employing more than 100,000 people, with a total investment of $2bn.
At a time when countries are trying to navigate the turbulent effects of US President Donald Trump’s tariff upheaval, this pact comes as a great economic boost for both countries.
What’s in the deal
Once made law, the agreement will reduce 90% of tariffs on British exports to India that include whisky, cars, cosmetics, salmon, lamb, medical devices, electrical machinery, soft drinks, chocolate, and biscuits.
India will get a zero-tariff deal on 99% of its tariff lines, covering nearly 100% of trade value. These include clothes, footwear and food products, including frozen prawns. With a zero tariff on textiles and apparel, Indian exports will get the same advantage as countries like Bangladesh and Vietnam.
India has got concessions on easy mobility for its professionals, including contractual suppliers and intra-corporate transferees with dependents.
The Double Contribution Convention (DCC) that ensures employees temporarily working in the UK for up to 3 years will continue paying social security contributions in their home country.
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Explained: The significance of the UK-India trade deal
India will reduce duties from 100% to 10% for a limited number of imports of cars, while Britain will give access to its markets for electric and hybrid vehicles.
Both countries have agreed to provide national treatment (same treatment as domestic companies) in select services, including telecom, construction and environment.
Areas of concern
But it’s Scotch whisky that has been a bone of contention in the negotiations. The UK has bargained hard, and tariffs have been slashed from 150% to 75% while retaining the issue of maturation of Scotch.
Whisky to be classified as Scotch needs to mature for at least three years. During this process, a small amount – dubbed the “angel’s share” – evaporates due to climate and casks.
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Anant S Iyer, director general of the Confederation of Indian Alcoholic Beverage Companies (CIABC), representing Indian manufacturers, told Sky News: “India has a tropical climate – the process of maturation is much faster. While in Scotland, the evaporation losses are around 2% a year, here it’s about 10-15% yearly, depending on where you’re distillery is based.
“So, a one-year-old mature Indian whisky could be equal to about a three-year-old Scotch whisky. This non-tariff barrier is something that’s causing us a huge setback.”
Indian manufacturers lose a third of volume over a three-year maturation period, which makes it unviable for them. Mr Iyer says, “while the FTA does bring cost savings for our blended whiskies, it will also open the floodgates for cheaper products from a plethora of Scotch brands in the UK”.
India is the largest whisky market in the world by volume, and Scotch has just 3% of that.
According to the Scotch Whisky Association, which represents over 90 companies, India is its largest export market by volume, with more than 192 million bottles exported in 2024.
Despite the deal, there is still little clarity on issues of “rules of origin”, a provision to help contain the dumping of goods; UK carbon tax, a concern for India as it could restrict the export of metal products; and the issue of international arbitration.
The security services expressed concern about the appointment of Lord Mandelson as ambassador to Washington, but No 10 went ahead anyway, Sky News understands.
Downing Street today defended the extensive vetting process which senior civil servants go through in order to get jobs, raising questions about whether or not they missed something or No 10 ignored their advice.
Sky News has been told by two sources that the security services did flag concerns as part of the process.
No 10 did not judge these concerns as enough to stop the ambassadorial appointment.
It is not known whether all of the detail was shared with Prime Minister Sir Keir Starmer personally.
Sky News has been told some members of the security services are unhappy with what has taken place in Downing Street.
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Lord Mandelson is close to Sir Keir’s chief of staff, Morgan McSweeney, who is known to have been keen on the appointment – and the pair spoke regularly.
No 10 says the security vetting process is all done at a departmental level with no No 10 involvement.
Shadow foreign secretary Priti Patel described the revelations as “extraordinary”.
“For Keir Starmer, and his Chief of Staff Morgan McSweeney, to have appointed Lord Mandelson despite concerns being raised by the security services shows a blatant disregard of all national security considerations and their determination to promote their Labour Party friends,” she said in a statement.
“Starmer leads a crisis riddled government consumed by a chaos of his own making, because he puts his Party before the needs of our country.
“The country deserves the honest truth this spineless prime minister refuses to give them.”
Image: Priti Patel described the revelations as ‘extraordinary’.
The prime minister, who selected Lord Mandelson for the role, made the decision after new emails revealed the Labour peer sent messages of support to Epstein even as he faced jail for sex offences in 2008.
In one particular message, Lord Mandelson had suggested that Epstein’s first conviction was wrongful and should be challenged.
The Foreign Office said the emails showed “the depth and extent of Peter Mandelson’s relationship with Jeffrey Epstein is materially different from that known at the time of his appointment”.
The decision to sack the diplomat was made by the prime minister and Foreign Secretary Yvette Cooper on Thursday morning, Sky News understands.
This was after Sir Keir had reviewed all the new available information last night.
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Harriet Harman, Ruth Davidson, and Beth Rigby react to the news of Lord Mandelson’s sacking.
It comes after a string of allegations around the diplomat’s relationship with Epstein, which emerged in the media this week, including a 2003 birthday message in which he called the sex offender his “best pal”.
Further allegations were then published in The Telegraph on Wednesday morning, suggesting that Lord Mandelson had emailed Epstein to set up business meetings following the latter’s conviction for child sex offences in 2008.
Additional emails were then published detailing how the diplomat wrote to Epstein the day before he went to prison in June 2008 to serve time for soliciting sex from a minor. Lord Mandelson said: “I think the world of you.”
Peter Mandelson, the UK ambassador to the US, has been sacked from his role as scrutiny builds over his relationship with disgraced financier Jeffrey Epstein.
The diplomat’s most famous quotation sums up his attraction to the rich and famous and his fondness for the trappings of wealth.
“We are intensely relaxed about people getting filthy rich,” he told tech executives when he was Sir Tony Blair’s trade and industry secretary in 1998.
“As long as they pay their taxes,” he added hurriedly, the former spin doctor known as the “Prince of Darkness” acutely aware of the risk of damaging headlines.
Now, less than nine months after his controversial appointment by Sir Keir Starmer as UK ambassador, his association with convicted sex offender Epstein suggests once again that he appears unable to avoid scandal.
Aged 71, Lord Mandelson – awarded a peerage by Gordon Brown in 2008 – had to resign from Sir Tony’s cabinet twice, first over an undeclared bank loan and then over intervening in a passport application by a top Indian businessman.
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Over four decades, nearly all on the front line of British politics, he has been a consummate political networker, but he has also been one of the most divisive figures in public life and his appointment last December was seen by critics as an act of cronyism by Sir Keir.
Acknowledging that Lord Mandelson was a controversial and divisive figure, Sir Tony declared in 1996: “My project will be complete when the Labour Party learns to love Peter Mandelson.”
The Washington role is seen as the most glittering and important diplomatic post in the UK government. The perks of the job include the luxurious ambassador’s residence in Massachusetts Avenue, a magnificent Queen Anne mansion designed by top architect Sir Edwin Lutyens.
When he appointed him as ambassador, Sir Keir saw Lord Mandelson as a skilful and persuasive link to the president, with his trade experience from his time as a cabinet minister and Brussels commissioner a vital qualification for the job.
Never one for false modesty, Lord Mandelson claims that when he first walked into the Oval Office the president said to him: “God, you’re a good-looking fellow, aren’t you?”
Lord Mandelson can be credited with several diplomatic triumphs in Washington. He played a vital role in ensuring the UK escaped the worst of Trump’s tariffs and he was instrumental in securing a much sought-after trade deal between the UK and the US.
And his silky PR skills were displayed when during Sir Keir’s first visit to the White House in February the PM theatrically pulled out of his inside pocket a letter from King Charles inviting the present to visit the UK.
It was a classic Lord Mandelson stunt and confirmed he’d lost none of the flair for presentation he’d first deployed when he was Labour leader Neil Kinnock’s spin doctor in the 1980s.
Lord Mandelson’s high-profile political career began as a TV producer until his appointment as Labour’s director of communications under Neil Kinnock in 1985.
He was seen as a brilliant if ruthless spin doctor, who masterminded the birth of New Labour but would berate newspaper editors when unfavourable stories were written by their political journalists.
Another classic Lord Mandelson attempt to kill an embarrassing story was to tell the journalist who wrote or broadcast it in a sneering voice: “That is a story that I believe will remain an exclusive.”
He became MP for Hartlepool in 1992 and helped propel Sir Tony to the leadership of the party after John Smith’s death in 1994, a move that led to a bitter feud with Mr Brown.
There’s an amusing story about Mandelson in Hartlepool, which he claims is a myth and blames Mr Kinnock for. It’s claimed he ordered “some of that delicious guacamole” in a fish and chip shop, mistaking mushy peas for avocado dip.
It was a perfect Lord Mandelson story, ridiculing his metropolitan tastes and ignorance of working-class life. But he claims the mistake was made by a young American woman student who was helping Labour’s campaign.
Image: Tony Blair and Lord Mandelson in 2000. Pic: Paul Faith/PA
His first cabinet job, trade and industry secretary in 1998, lasted only five months after he was forced to quit after failing to declare a home loan from Labour millionaire Geoffrey Robinson to his building society.
His resignation was similar in one respect to the demise of former deputy prime minister Angela Rayner last week, in that it was over irregularities in buying a property: in Hove in her case, in fashionable Notting Hill in his.
He bounced back as Northern Ireland secretary in 1999 and was said to enjoy the luxury of Hillsborough Castle, which went with the job. But he was forced to resign a second time over claims he helped businessman Srichand Hinduja with an application for UK citizenship.
When he held his seat in Hartlepool in the 2001 general election, Mandelson made a passionate and defiant victory speech at his count in which he declared: “I’m a fighter, not a quitter.”
Yet three years later he did quit as an MP, when he became a trade commissioner in Brussels, serving a four-year term during which he had a spectacular row with French president Nicolas Sarkozy, who accused him of selling out French farmers in trade talks.
There were more controversies arising from his time in Brussels. In 2006, it was reported that he received a free cruise on a yacht from an Italian mogul who was said to have benefited from tariffs on Chinese shoes when Mandelson was EU trade commissioner.
Image: Former Labour leader Neil Kinnock (L) with Peter Mandelson. Pic: PA
Reports also claimed he had been lent a private jet by banking and business tycoon Nat Rothschild. And it was later reported that he had a holiday in August 2008 on the yacht of Russian oligarch Oleg Deripaska off the Greek island of Corfu.
Mr Deripaska was said to have benefited from a cut in EU aluminium tariffs introduced by Mandelson. But prime minister Brown said Mandelson’s dealings with Mr Deripaska had been “found to be above board”.
After Brussels came perhaps his most spectacular and unexpected political comeback, when in 2008 his old foe Gordon Brown, by now prime minister but facing challenges to his leadership, brought him back as business secretary with a peerage.
A year later, Mr Brown awarded him the grand title, previously held by Michael Heseltine under John Major, of first secretary of state, a position he held until Labour’s election defeat in 2010.
To this day, Lord Mandelson remains a devoted Blairite rather than a soulmate of Mr Brown. And in the run-up to Sir Keir’s election victory last year he was back in the fold, offering advice on campaigning and policy.
He got his reward with the plum job of ambassador in Washington. But his links to a very American scandal, involving the disgraced financier and sex offender Epstein, have pushed him out of political life. Again.
Peter Mandelson’s position was completely unsustainable, but it took Sir Keir Starmer 24 hours after everybody else to realise the inevitable.
In the chaotic interim, this generated the extraordinary spectacle of No10 saying that they had full confidence in their man in Washington because – and it feels incredible to type this – No10 had been fully aware that the peer had an extended relationship with a convicted paedophile after the point he had been to jail in the US, and was content with this situation.
This is why the issue has become a matter of Starmer‘s judgement almost as much as Peter Mandelson‘s.
Indeed, there were echoes here of the Chris Pincher affair that led to Boris Johnson’s downfall – a leader stubbornly defending acts which revolted the bulk of the party, in a tone deaf act of self-harm.
And revolted, they were.
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Almost the entire Labour Party was reacting with horror at the revelation, and even more so at the defence.
Less than 24 hours before his departure, Starmer was saying: “The ambassador has repeatedly expressed his deep regret for association with him, he’s right to do so. I have confidence in him and he’s playing an important role in the UK-US relationship.”
Words of certainty – but done once again without access to full facts.
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Dangerously, the PM was also defending a vetting process which would by implication put him in possession of facts that should have ruled Mandelson out of that job.
“Full due process has gone through when the appointment was made,” he said.
Now the line from a junior foreign office minister is that Mandelson hadn’t told him. So either the vetting failed or this isn’t quite accurate.
My understanding is that no one in government knows the last time Mandelson did see Epstein – the absence of certainty on that key fact must have set off alarm bells.
Right now, No10 will be thinking and hoping that, with just six days to go until the state visit by Donald Trump, which was meant to be organised by Mandelson, people will not focus too much on this question.
However, given the current rate of one big beast in government being sacked every week, this will ultimately land at Starmer’s feet.