Businesses and workers in London are set to benefit from the UK’s trade deal with India, as new analysis shows the landmark agreement will deliver a £310 million boost for the local economy as part of the Plan for Change.
Both Prime Ministers met yesterday morning for the signing of the landmark UK-India trade deal as new analysis reveals communities across every region of the
UK will benefit from its £4.8 billion increase to UK GDP each year.
It comes as a series of investment and export wins have been confirmed by UK and Indian businesses, representing an overall boost of nearly £6 billion and
creating over 2,200 jobs.
1,115 London businesses exported goods worth £1.8 billion to India last year, this could grow even more thanks to lower tariffs, fewer barriers to trade, and
easier customs. The capital’s renown gin distilleries have been selling the beloved spirit since the 18th
century – sales to India are likely to increase as tariffs under the deal are halved from 150% to 75% before being reduced further to 40% within ten years.
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.”
The Mayor of London, Sadiq Khan, said:
“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 will enjoy an uplift in pay as UK wages grow by £2.2 billion each year, and could also see cheaper prices and more choice on clothes, shoes,
and food products. The UK already imports £11 billion in goods from India but liberalised tariffs on Indian goods will make it easier and cheaper to buy their best products.
For businesses in London this could mean potential savings when importing components and materials used in areas such as advanced manufacturing or luxury and
consumer goods.
India’s trade average tariff will drop from 15% to 3% which means London companies selling fashion and cosmetic products to India will find it easier to sell
to the Indian market. It gives the UK an advantage over international competitors in reaching the Indian market, forecast to have over a quarter of a billion high income consumers by 2050.
Aligned with the UK’s recent Industrial and Trade Strategies, the deal will support the sectors which drive the most growth for the London economy including
insurance and banking. Locked in certainty for services achieved through this trade deal is expected to lead to an additional £1.7 billion for the sector, which already accounts for 59% (£10.1 billion) of total UK exports to India last year.
