The United Kingdom and India have signed a historic free trade agreement (FTA) projected to boost bilateral trade by £25.5 billion by 2040. This deal, finalized after more than three years of negotiations, marks the UK’s most significant trade achievement since Brexit and represents a major economic and diplomatic win for both countries.
Under the agreement, India will slash tariffs on 90% of British goods, including high-value exports like whisky, medical devices, and automobiles. Whisky tariffs—currently at 150%—will be cut to 40% over the next decade, while auto tariffs will fall from over 100% to just 10% under a quota system.
In return, 99% of Indian exports to the UK—including textiles, food products, and jewelry—will receive duty-free access. This is expected to deliver a significant boost to India’s export sector, especially in labour-intensive industries.
The FTA also introduces key provisions for services trade and business mobility. Indian professionals such as chefs, musicians, and yoga instructors will benefit from expanded visa access to the UK, supporting India’s service sector.
Additionally, a new social security agreement ensures that Indian professionals working temporarily in the UK won’t face double contributions, offering cost savings and incentivizing mobility.
Economic forecasts estimate the deal will increase the UK’s GDP by £4.8 billion and India’s by up to £8.6 billion by 2035. Both governments have praised the agreement as a turning point in bilateral relations.
UK Prime Minister Keir Starmer described the deal as “transformative,” while Indian Prime Minister Narendra Modi said it would “drive inclusive growth, innovation, and global competitiveness for both nations.”
With final ratification expected in the coming months, the agreement is poised to deepen economic and strategic ties between two of the world’s largest economies.
