India-UK Ink Historic Free Trade Deal to Boost £25.5 Billion Trade

 

India and the United Kingdom today signed a landmark Free Trade Agreement (FTA) in London, witnessed by Prime Minister Narendra Modi and UK Prime Minister Keir Starmer. Commerce Minister Piyush Goyal was also present for the formal ceremony. The deal is projected to boost the UK’s economy by £4.8 billion and raise wages by £2.2 billion annually in the long term, with bilateral trade expected to rise by £25.5 billion each year.

The FTA aims to double India-UK trade to $120 billion by 2030 and increase it by another $40 billion by 2040. India will scrap import duties on key exports like leather, textiles, and footwear, while the UK will lower tariffs on whisky, gin, cosmetics, soft drinks, lamb, and other agricultural goods. A major change sees India reducing import duties on certain UK cars from over 100% to just 10%, a move that raises concerns for local auto manufacturers.

UK firms will now have easier access to India’s banking, telecom, and insurance sectors, while India secured limited visa relaxations and market access. British companies can also bid for Indian central government contracts, potentially impacting domestic suppliers.

Notably, India agreed to adopt some IP rules beyond WTO norms, raising concerns over affordable medicine availability. The FTA also embraces digital trade systems, paperless customs, and mutual safety and hygiene standards to smoothen transactions. However, India did not secure exemptions from the UK’s future carbon tax, which may affect its steel and aluminium exports.

Prime Minister Modi, warmly welcomed by the Indian diaspora in London, called the deal a “big step in economic partnership,” emphasizing its potential to create jobs, fuel growth, and enhance bilateral prosperity.