UK and India likely to introduce free trade agreement next week

India and Britain are expected to seal a long-awaited free trade deal next week, two Indian government sources said, granting Indian textiles and electric vehicles some duty-free access to the UK market and easing British exports of whisky, cars and food.

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In May, both countries announced the conclusion of trade negotiations after three years of stop-start negotiations, aiming to increase bilateral trade, remove trade barriers and allow duty-free entry of goods.

The countries are now preparing to formally sign the agreement, and the announcement could coincide with Indian Prime Minister Narendra Modi's expected visit to London next week, one of the Indian officials said.

The trade pact will take effect in about a year, after it is approved by the British parliament and India's federal cabinet, the official added.

Officials spoke on the condition of anonymity as the details are not public.

"The trade agreement offers a win-win for both countries," the second Indian source said, adding that Indian consumers would gain access to Scotch whisky at lower prices, as import tariffs will drop to 75% from 150% immediately, and further to 40% over the next decade.

On cars, India will cut duties to 10% from 100% under a quota system that will be gradually liberalised, the sources said. In return, Indian manufacturers are expected to gain access to the UK market for electric and hybrid vehicles, also under a quota regime, they added.