India, UK Sign Landmark Free Trade Agreement To Boost $34 Billion In Annual Trade

In a defining moment for India–UK economic relations, Prime Minister Narendra Modi and his British counterpart, Keir Starmer, signed a long-anticipated Free Trade Agreement (FTA) on Thursday, aimed at significantly enhancing bilateral trade and investment.

According to official estimates, the pact will likely increase annual trade between the two nations by approximately $34 billion, bringing a substantial lift to key sectors on both sides.

Under the terms of the agreement, India will reduce tariffs on 90 per cent of goods imported from the UK, while the UK will lower duties on 99 per cent of Indian exports.

The deal also aims to streamline regulatory processes and ease trade barriers across multiple industries.

PM Starmer Hails Deal as Win for UK Economy

Taking to X, UK Prime Minister Starmer posted, “A landmark deal with India means jobs, investment and growth here in the UK. It creates thousands of British jobs, unlocks new opportunities for businesses and puts money in the pockets of working people. That’s our Plan for Change in action.”

For Indian consumers, the deal will make a range of imported products, including Scotch whisky, gin, luxury vehicles, cosmetics, and medical devices, more affordable.

On the Indian export front, farm produce will now enjoy tariff parity with major European suppliers like Germany.

The removal of duties on textiles and leather will likely strengthen India’s edge over regional competitors such as Bangladesh and Cambodia.

India’s leather industry, in particular, is to expand its market share in the UK by an additional 5 per cent within two years.

Other sectors will also benefit.

Electronics and engineering goods exports are to double by 2030, while gems and jewellery shipments, currently valued at $941 million, will likely double within three years.

UK officials anticipate a nearly 60 per cent surge in British exports to India over the long term, reinforcing the agreement’s mutual benefits.

Earlier in the day, Prime Minister Modi met his British counterpart Keir Starmer at the Chequers Estate, marking the start of his fourth official visit to the United Kingdom.

The leaders are holding comprehensive discussions covering all aspects of the bilateral relationship.

Their dialogue includes updates on the Comprehensive Strategic Partnership (CSP), with key focus areas including trade and economy, technology, defence, climate change, healthcare, education, and cultural exchanges.

Prime Minister Modi is also scheduled to meet King Charles III later in the day.

Also Read: PM Modi Begins UK Visit; Meets British PM Keir Starmer At Chequers