On May 6, 2025, Prime Minister of India Shri Narendra Modi and Prime Minister of United Kingdom Sir Keir Starmer, following three years of intense negotiations, announced the conclusion of the landmark multi-million-pound trade deal (India-UK FTA). This historic and ambitious deal is projected to boost the annual bilateral trade between the two nations and boost jobs, exports and national growth. This deal is expected to double bilateral trade by 2030, from the current USD 60 billion.
Implementation of the India-UK FTA is expected within 1 (one) year on a mutually agreed date, followed by signing and approval from the Indian Government and ratification by the UK Parliament.
Set out below are some of the key benefits of the India-UK FTA:
Market Access:
- 99% of ‘zero-duty access’ to Indian exports in the UK market, opening broad export opportunities for sectors such as textiles, leather, footwear, marine products, jewelry, automobile parts and several more.
- Reduction of import duties on 90% of Indian imports, with 85% of these becoming completely tariff-free over the next 10 (ten) years.
- Lower tariffs on 90% of Key British Exports on a range of high value products including whisky, gin, advanced machinery, medical devices, aerospace components and several more.
- Reduced tariff on automobiles from the previous 100% to 10% under a tariff rate quota system.
- Mutual Benefit of lower prices: for UK consumers on Indian products such as shoes, food items, apparel; and for Indian consumers on UK products such as cosmetics, whisky and medical devices.
Enhancement of services and professional mobility:
- Opening up of new opportunities and jobs w.r.t. commitment from the UK in services such as IT/ITeS, financial services, business and educational services and several more.
- Signing of a Double Contribution Convention, which recognizes businesses in both the countries and aid in cutting costs and encouraging the India-UK startup ecosystem and partnership by exempting Indian national workers temporarily in the UK and their employers from social security contributions for 3 (three) years (on similar principles of UK’s other Social Security Agreements).
- Increased mobility for professionals which includes contractual service suppliers; business visitors; independent professionals like yoga instructors, musicians, chefs, and investors.
Economic Growth
- Projected increase in UK’s GDP by GBP 3.3 billion by 2035 with significant positive development for employment in India in labour intensive sectors including leather, footwear, textiles and so on.
- The India-UK FTA deal has ensured non-tariff barriers for free flow of goods and services without creation of any unjustified restriction on Indian exports.
- The India-UK FTA seeks to promote good regulatory practices and enhance transparency with India’s own focus on domestic reforms to enhance the ease of doing business.
As two leading democracies and global innovation hubs, India and the UK reaffirm their commitment to strengthening economic cooperation and working together to address global challenges. The India–UK FTA sets a new benchmark for fair, ambitious and modern trade agreements worldwide.
Government of India’s press release on the historic India-UK FTA may be accessed at: https://www.pib.gov.in/PressReleasePage.aspx?PRID=2127321