London, July 24, 2025 — In a historic development, India and the United Kingdom have formally signed a comprehensive Free Trade Agreement (FTA), marking the most significant bilateral trade pact for the UK since its exit from the European Union. The agreement was finalized during Prime Minister Narendra Modi’s official visit to London, where he met with British Prime Minister Keir Starmer at Chequers, the UK PM’s official country residence.
The FTA, negotiated over three years, is projected to boost bilateral trade by approximately $34 billion annually, with both nations aiming to double trade volumes to $120 billion by 2030. The pact eliminates tariffs on 99% of Indian exports to the UK and reduces duties on 90% of British goods entering India.
Key sectors set to benefit include:
- For India: Textiles, leather, footwear, gems and jewelry, marine products, and engineering goods. The agreement is expected to particularly support MSMEs, artisans, farmers, and youth, offering broader market access and simplified regulatory pathways.
- For the UK: Tariffs on products such as whisky, automobiles, cosmetics, and medical devices will drop significantly—from an average of 15% to just 3%, enhancing competitiveness in the Indian market.
The deal also includes provisions for:
- Social security exemptions for Indian professionals on temporary assignments in the UK, reducing financial burdens and encouraging global mobility.
- Digital trade cooperation, focusing on cybersecurity, consumer protection, and regulatory transparency.
- Recognition of qualifications and skill development, aimed at aligning Indian talent with global market needs.
Prime Minister Modi hailed the agreement as a “historic day in our relations,” emphasizing its alignment with India’s Viksit Bharat 2047 vision. Prime Minister Starmer described the pact as “a major win for Britain,” highlighting its potential to create thousands of jobs and unlock new business opportunities.
Commerce Minister Piyush Goyal and UK Secretary of State for Business and Trade Jonathan Reynolds signed the agreement in the presence of both leaders. The two Prime Ministers also unveiled the UK-India Vision 2035, a strategic roadmap to deepen cooperation across trade, defence, climate action, and education.
The FTA now awaits ratification by the British Parliament, with implementation expected within the next year. The signing marks a pivotal moment in India-UK relations, reinforcing their shared commitment to economic growth, innovation, and inclusive development.
