Following over three years of negotiations, Prime Ministers Narendra Modi and Keir Starmer officially signed the India–UK Free Trade Agreement (FTA) on July 24, 2025, marking the most significant bilateral trade deal for both nations since the UK left the EU. The agreement aims to boost trade by approximately £25.5 billion (about $34 billion) a year by 2040 and unlock new economic opportunities across sectors
Massive Tariff Reductions on Both Sides
- For UK exports to India: Average tariffs slashed from 15% to 3%, with steep cuts on whisky, gin, automobiles, and medical devices. Whisky duties will fall from 150% to 75% immediately and to 40% over 10 years. Auto tariffs drop from over 100% to 10% under a phased quota.
- For Indian exports to the UK: Zero duties on 99% of Indian goods, including textiles, footwear, gems & jewellery, marine products, engineering goods, pharma, and software services.
Key Provisions & Sector Impacts
- Services & Mobility: Enhanced access for professionals—business visitors, intra-corporate transfers, chefs, yoga instructors—alongside a Double Contribution Convention eliminating dual social security payments for up to three years.
- Strategic Collaboration: The deal forms part of the broader “Vision 2035” roadmap, expanding collaboration in defence, education, climate, innovation, and technology.
- Future Growth Areas: Agriculture, clean energy procurement, digital trade, pharmaceuticals, autos, and professional services are poised for new access and market depth
Economic Upside for Business and Jobs
- British benefits: The FTA is expected to add £4.8 billion annually to the UK GDP, boost wages by £2.2 billion per year, and unlock £6 billion in trade and investment deals.
- Indian gains: Estimated to double bilateral trade from ~$60 billion to upwards of $120 billion by 2030, supporting MSMEs, farmers, and services exporters.The Times of India
Next Steps & Implementation
- Legal review and parliamentary ratification: Expected within 9 to 12 months; India and the UK are in the process of final formal approvals. Deal implementation will be phased over a decade.
Why the Agreement Matters
- First-ever comprehensive FTA between India and a European country, marking a shift in India’s trade diversification strategy.
- Balanced structure: Equitable benefits for both economies with high-value items in focus.
- Strategic and symbolic value: Reinforces India–UK relations while setting a blueprint for future trade deals.
✅ Final Outlook
The India–UK Free Trade Agreement, signed on July 24, 2025, represents a historic moment in bilateral cooperation. With sweeping tariff cuts, expanded service access, and strategic sector collaboration, the FTA lays the groundwork for a robust economic partnership. It promises to catalyze trade growth toward $120 billion by 2030 and deepen ties beyond commerce—ushering in an era of shared prosperity and global competitiveness.
