Overview

India and the United Kingdom have signed a landmark Free Trade Agreement (FTA), hailed as the most significant trade deal for both countries in recent years. The agreement was formalized on July 24, 2025, during a meeting between Prime Minister Narendra Modi and UK Prime Minister Keir Starmer in London. The pact is projected to:

• Boost annual bilateral trade by $34 billion
• Double total trade to $120 billion by 2030
• Attract nearly £6 billion in new investments and create thousands of jobs in both economies

Key Features of the Agreement

Tariff Reductions

• India will cut tariffs on 90% of UK products, reducing its average tariff on UK goods from 15% to 3%
• The UK will eliminate duties on 99% of Indian exports, covering sectors like textiles, pharmaceuticals, leather goods, auto parts, and agricultural products.

Product/Sector Previous Tariff New Tariff Details UK whisky (Scotch) 150% 75% (immediate); 40% within 10 years Stepwise reduction benefits UK whisky makers UK automobiles (quota-based) Will improve market access for UK auto exporters. Indian textiles, gems, leather Varies 0% (duty-free access) Labour-intensive sectors to gain substantially.

Market Access

• Nearly all Indian goods will get duty-free access to the UK market
• British products like cars, whisky, medical devices, cosmetics, and soft drinks will become cheaper and more accessible for Indian consumers.

Investment and Jobs

• The FTA is expected to bring £6 billion in new UK-India investments
• Over 2,200 new UK jobs are expected, with Indian firms expanding their UK presence and British companies securing more contracts in India.

Economic and Social Benefits

• The deal is estimated to add £4.8 billion to the UK’s GDP annually and increase UK wages by £2.2 billion.
• Indian farmers, MSMEs, and youth will benefit from better market access for food, farm, and processed products, as well as opportunities in textiles, engineering goods, and IT services.
• The agreement enhances mobility for professionals, especially in IT, finance, and creative fields, between both countries.

Broader Strategic Cooperation

• The pact also sets the stage for deeper cooperation in defense, technology, education, and climate innovation.

Implementation Timeline

• The agreement requires ratification by the British Parliament and India’s Union Cabinet. Full implementation is expected within one year.

Summary Table: India-UK FTA At a Glance

Aspect Details Annual bilateral trade boost $34 billion. Tariff on UK products in India Drops from 15% to 3%. Duty-free access 99% of Indian exports to UK; 90% of UK products to India. Major beneficiary sectors Leather, textiles, processed foods, IT, whisky, automobiles, pharma Implementation time Anticipated within one year, pending legislative approvals Long-term trade target $120 billion by 2030.

Implications

This FTA marks India’s first major trade agreement with a developed nation in a decade and represents the UK’s biggest deal since Brexit. It is designed to fuel growth, generate jobs, reduce prices, and expand choices for consumers and businesses in both countries.

#IndiaUK
#TradeDeal
#HistoricAgreement
#BilateralTrade
#EconomicPartnership
#GlobalTrade
#ExportImport
#FreeTradeAgreement
#StrategicAlliance
#MarketAccess

Citations:
[1] India and UK sign historic Free Trade Agreement, set to … https://economictimes.com/news/economy/foreign-trade/india-and-uk-sign-historic-free-trade-agreement-set-to-boost-annual-trade-by-34-bn/articleshow/122879041.cms
[2] India-UK Trade Deal Explained: Key Benefits and Changes https://www.india-briefing.com/news/india-uk-trade-deal-winners-and-economic-benefits-explained-38824.html/
[3] Prime Minister secures thousands of British jobs and £6 … https://www.gov.uk/government/news/prime-minister-secures-thousands-of-british-jobs-and-6-billion-in-investment-and-export-wins-as-historic-trade-deal-with-india-signed
[4] India-UK trade deal signed: Landmark multi-billion dollar … https://timesofindia.indiatimes.com/business/india-business/india-uk-trade-deal-signed-landmark-multi-billion-dollar-free-trade-agreement-sealed-during-pm-modis-visit-all-about-the-fta/articleshow/122870459.cms
[5] How will the UK-India FTA redefine economic ties between … https://www.ey.com/en_in/insights/tax/how-will-the-uk-india-fta-redefine-economic-ties-between-the-two-nations
[6] India–UK Free Trade Agreement: Sector and product-wise … https://www.newindianexpress.com/business/2025/Jul/24/indiauk-free-trade-agreement-sector-and-product-wise-impacts
[7] India to get cheaper British cars, medical devices; UK fin … https://economictimes.com/news/economy/foreign-trade/india-to-get-cheaper-british-cars-medical-devices-uk-fin-services-cos-to-get-equal-footing-in-fta/articleshow/122873176.cms
[8] What will become cheaper as India-UK sign FTA? https://www.firstpost.com/explainers/india-uk-fta-scotch-cars-chocolates-what-will-become-cheaper-13911689.html
[9] India-UK FTA Live: ‘Trade deal to benefit youth, farmers … https://www.financialexpress.com/policy/economy-india-uk-free-trade-deal-live-updates-pm-modi-keir-starmer-india-uk-fta-agreement-benefits-impact-latest-news-3924808/
[10] India-UK free trade agreement: Indian farmers to benefit most https://timesofindia.indiatimes.com/business/india-business/india-uk-free-trade-agreement-indian-farmers-to-benefit-most-heres-why/articleshow/122877742.cms
[11] Historic India-UK Free Trade Pact Signed, Indian Farmers … https://www.ndtv.com/world-news/pm-modi-uks-starmer-sign-historic-free-trade-pact-8940127
[12] India-UK FTA: PM Modi, Starmer to sign historic deal, $34 … https://economictimes.com/news/economy/foreign-trade/india-uk-fta-pm-modi-starmer-to-sign-historic-deal-34-bn-annual-trade-boost-ahead/articleshow/122872196.cms
[13] India, UK ink historic trade deal https://www.rediff.com/business/report/india-uk-ink-historic-trade-deal/20250724.htm
[14] India, UK sign historic free trade deal during PM’s meeting … https://www.indiatoday.in/india/story/india-uk-sign-landmark-free-trade-agreement-during-pms-meeting-with-uks-starmer-2760664-2025-07-24
[15] Starmer and Modi sign £6bn India-UK trade deal https://www.bbc.com/news/articles/c307ggj492vo
[16] India–United Kingdom Free Trade Agreement https://en.wikipedia.org/wiki/India%E2%80%93United_Kingdom_Free_Trade_Agreement
[17] India-UK FTA signed: Whisky, EVs, cosmetics and … https://economictimes.com/news/economy/foreign-trade/india-uk-fta-signed-whisky-evs-cosmetics-and-jewellery-to-get-cheaper-heres-what-each-side-gets/articleshow/122879961.cms
[18] India-UK Free Trade Agreement (FTA) | Current Affairs https://visionias.in/current-affairs/monthly-magazine/2025-06-17/international-relations/india-uk-free-trade-agreement-fta
[19] UK-India Sign Historic Trade Deal, Then PM Modi Stuns … https://www.youtube.com/watch?v=OE2yjcaZtVY