Trump's tariffs have prompted countries across the world to redouble efforts to seek new trade partners. And Britain and India clinched a long coveted free trade pact amidst the tariff turmoil.
The deal, between the world's fifth and sixth largest economies aims to increase bilateral trade by a further 25.5 billion pounds ($34 billion) by 2040. The free trade deal provides for easier mobility of certain professionals, while under a separate pact workers no longer have to make social security contributions in both India and Britain during temporary postings in the other country.
Indian Prime Minister Narendra Modi said the trade deal was "ambitious and mutually beneficial". British Prime Minister Keir Starmer said the strengthened alliance would reduce trade barriers in a "new era for trade".
It marks India opening up its long-guarded markets, including automobiles, setting an early example for the South Asian nation's likely approach to dealing with major Western powers such as the U.S. and the European Union.
It also represents Britain's most significant trade deal since it left the EU in 2020, though the projected boost to British economic output from the deal, of 4.8 billion pounds a year by 2040, is small compared to the country's gross domestic product of 2.6 trillion pounds in 2024.
Many countries are actively seeking new trade partners to diversify their economies and reduce reliance on USA markets, particularly in response to trade tensions. India’s new trade agreements with the UK are a step in that direction and sends a strong message to President Trump.
