By R Anil Kumar
Bengaluru/ London. Prime Minister Narendra Modi and his British counterpart Keir Starmer on July 24, signed the eagerly-awaited India-UK Free Trade Agreement (FTA), marking a landmark moment in the bilateral economic relationship.
As part of the historic pact, the UK will reduce duties on 99 per cent of Indian exports, while India will lower tariffs on 90 per cent of British goods, significantly easing tariff barriers and regulatory procedures across multiple sectors.
The agreement is expected to make imported goods more affordable for Indian consumers, including luxury cars, cosmetics, medical devices, gin, and Scotch whisky. Within the next two years, India’s leather industry is projected to increase its market share in the UK by 5 per cent.
Britain and India signed Free Trade Agreement during the visit by Indian Prime Minister Narendra Modi, sealing a deal to cut tariffs on goods from textiles to whisky and cars and allow more market access for businesses.
Talks on the trade pact were concluded in May after three years of stop-start negotiations, with both sides hastening efforts to clinch a deal in the shadow of tariff turmoil unleashed by U.S. President Donald Trump.
The agreement between the world’s largest economies aims to increase bilateral trade by a further 25.5 billion pounds ($34 billion) by 2040.
It is Britain’s biggest trade deal since it left the European Union in 2020 but its impact will be a fraction of the effect of leaving the orbit of its closest trading partner.
It is India’s biggest strategic partnership, and it could provide a template for a long-mooted deal with the EU and for talks with other regions.
Both sides hailed as historic a deal which will take effect following a ratification process, likely within a year, after which firms such as whisky distiller Diageo (DGE.L), and carmakers including BMW (BMWG.DE), Nissan, Aston Martin and Tata-owned Jaguar Land Rover could benefit from lower duties.
“The deal is now signed, sealed and delivered,” was how UK Prime Minister Keir Starmer described the free trade agreement with India, formalised after three years of negotiations and across two governments.
At his Chequers country residence, British Prime Minister Keir Starmer said there would be huge benefits for both countries, making trade cheaper, quicker and easier in a new global era for trade.
PM Modi called the agreement “a blueprint for our shared prosperity,” highlighting how Indian goods from textiles to jewellery and seafood would secure better market access.
The countries also agreed a partnership covering areas such as defence and climate, and aim to strengthen co-operation on tackling crime.
PM Modi spent nearly three hours with Starmer before going to meet King Charles at his Sandringham Estate.
The trade deal came about quickly after Britain’s new Labour government restarted negotiations in February.
WHISKY AND CARS
Under the trade agreement, tariffs on Scotch whisky will drop to 75% from 150% immediately, and slide to 40% over the next decade. Tariffs on drinks such as brandy and rum will be cut to 110% initially and end up at 75%.
On cars, India will cut duties to 10% within five years from current levels of up to 110% under a quota system that will be gradually liberalised.
In return, Indian manufacturers will gain access to the British market for electric and hybrid vehicles, also under a quota system.
Under the deal, 99% of Indian exports to Britain will benefit from zero duties, including textiles, and Britain will have reductions on 90% of its tariff lines, with the average tariff UK firms face dropping to 3% from 15%.
The deal will facilitate easier access for temporary business visitors although visas are not covered. The sides also agreed that workers will no longer have to make social security contributions in both India and Britain while on temporary postings to the other.
British firms will be able to access India’s procurement market for projects in sectors such as clean energy, and the trade deal also covers services sectors such as insurance.
This partnership aims to take bilateral relations to new heights over the next decade, going beyond trade to include enhanced cooperation in defence through a new Defence Industrial roadmap, innovation, climate change, border security, tackling organised crime and corruption, educational connections, and harnessing frontier technologies to strengthen national security. The Vision 2035 is designed to foster prosperity, innovation, and deeper strategic ties amid rapid global change.
The trade deal is expected to create thousands of jobs in both countries and unlock new opportunities for businesses. British companies, including Airbus and Rolls-Royce, have already announced significant business contracts in India as part of this expanding partnership. The deal also includes measures to ensure UK financial services companies have equal footing in the Indian market by binding foreign investment caps in certain sectors.
From Defence to Farmers: What PM Modi Said on Historic Free Trade Agreement
PM Modi emphasised the agreement’s potential to boost trade, create opportunities for youth and MSMEs, and deepen cultural and educational ties.
Prime Minister Narendra Modi and his British counterpart Keir Starmer highlighted the significance of the India-UK Free Trade Agreement (FTA), and outlined its wide-ranging benefits for both nations during a joint press conference.
PM Modi statement following the signing of the India-UK FTA
I would like to express my heartfelt gratitude to Prime Minister Keir Starmer for his warm welcome. Today is a historic day in our relationship. I am happy that after many years of hard work, today, the Comprehensive Economic and Trade Agreement has been concluded between the two countries.
Indian textiles, footwear, gems and jewellery, seafood and engineering goods will get better market access in the UK. New opportunities will be created in the UK market for India’s agricultural produce and processed food industry.
This agreement will prove especially beneficial for the youth, farmers, fishermen and MSME sector of India. On the other hand, UK-made products – such as medical devices and aerospace parts – will be available to the people and industry of India at accessible and affordable rates.
To give new momentum and energy to our comprehensive strategic partnership in the next decade, we will also discuss Vision 2035. This will be a roadmap for a strong, trusted and ambitious partnership in the areas of technology, defence, climate, education and people-to-people connect.
We thank Prime Minister Keir Starmer and his Government for their strong condemnation of the terrorist attack in Pahalgam. India and the UK are united in the belief that there are no double standards in the fight against terrorism.
We also agree that forces that espouse extremist ideologies should not be allowed to misuse democratic freedoms. Those who misuse democratic freedoms to undermine democracy must be held accountable.
We have been sharing views on peace and stability in the Indo-Pacific, the ongoing conflict in Ukraine and the situation in West Asia. Respecting the sovereignty and territorial integrity of all countries is imperative. The demand of today’s era is development, not expansionism.
Last month, several UK citizens were among those killed in the air crash in Ahmedabad. Our condolences to their families.
Both the countries are writing a new chapter together in the field of education. Six UK universities are opening campuses in India. Just last week, the South Hampton University campus was inaugurated in Gurugram.
For both of us, cricket is not just a game, but a passion. And also, a great metaphor for our partnership. There may be a swing and a miss at times, but we always play with a straight bat! We are committed to building a high scoring solid partnership.
India and UK sign free trade pact during PM Modi visit
By R Anil Kumar
Bengaluru/ London. Prime Minister Narendra Modi and his British counterpart Keir Starmer on July 24, signed the eagerly-awaited India-UK Free Trade Agreement (FTA), marking a landmark moment in the bilateral economic relationship.
As part of the historic pact, the UK will reduce duties on 99 per cent of Indian exports, while India will lower tariffs on 90 per cent of British goods, significantly easing tariff barriers and regulatory procedures across multiple sectors.
The agreement is expected to make imported goods more affordable for Indian consumers, including luxury cars, cosmetics, medical devices, gin, and Scotch whisky. Within the next two years, India’s leather industry is projected to increase its market share in the UK by 5 per cent.
Britain and India signed Free Trade Agreement during the visit by Indian Prime Minister Narendra Modi, sealing a deal to cut tariffs on goods from textiles to whisky and cars and allow more market access for businesses.
Talks on the trade pact were concluded in May after three years of stop-start negotiations, with both sides hastening efforts to clinch a deal in the shadow of tariff turmoil unleashed by U.S. President Donald Trump.
The agreement between the world’s largest economies aims to increase bilateral trade by a further 25.5 billion pounds ($34 billion) by 2040.
It is Britain’s biggest trade deal since it left the European Union in 2020 but its impact will be a fraction of the effect of leaving the orbit of its closest trading partner.
It is India’s biggest strategic partnership, and it could provide a template for a long-mooted deal with the EU and for talks with other regions.
Both sides hailed as historic a deal which will take effect following a ratification process, likely within a year, after which firms such as whisky distiller Diageo (DGE.L), and carmakers including BMW (BMWG.DE), Nissan, Aston Martin and Tata-owned Jaguar Land Rover could benefit from lower duties.
“The deal is now signed, sealed and delivered,” was how UK Prime Minister Keir Starmer described the free trade agreement with India, formalised after three years of negotiations and across two governments.
At his Chequers country residence, British Prime Minister Keir Starmer said there would be huge benefits for both countries, making trade cheaper, quicker and easier in a new global era for trade.
PM Modi called the agreement “a blueprint for our shared prosperity,” highlighting how Indian goods from textiles to jewellery and seafood would secure better market access.
The countries also agreed a partnership covering areas such as defence and climate, and aim to strengthen co-operation on tackling crime.
PM Modi spent nearly three hours with Starmer before going to meet King Charles at his Sandringham Estate.
The trade deal came about quickly after Britain’s new Labour government restarted negotiations in February.
WHISKY AND CARS
Under the trade agreement, tariffs on Scotch whisky will drop to 75% from 150% immediately, and slide to 40% over the next decade. Tariffs on drinks such as brandy and rum will be cut to 110% initially and end up at 75%.
On cars, India will cut duties to 10% within five years from current levels of up to 110% under a quota system that will be gradually liberalised.
In return, Indian manufacturers will gain access to the British market for electric and hybrid vehicles, also under a quota system.
Under the deal, 99% of Indian exports to Britain will benefit from zero duties, including textiles, and Britain will have reductions on 90% of its tariff lines, with the average tariff UK firms face dropping to 3% from 15%.
The deal will facilitate easier access for temporary business visitors although visas are not covered. The sides also agreed that workers will no longer have to make social security contributions in both India and Britain while on temporary postings to the other.
British firms will be able to access India’s procurement market for projects in sectors such as clean energy, and the trade deal also covers services sectors such as insurance.
This partnership aims to take bilateral relations to new heights over the next decade, going beyond trade to include enhanced cooperation in defence through a new Defence Industrial roadmap, innovation, climate change, border security, tackling organised crime and corruption, educational connections, and harnessing frontier technologies to strengthen national security. The Vision 2035 is designed to foster prosperity, innovation, and deeper strategic ties amid rapid global change.
The trade deal is expected to create thousands of jobs in both countries and unlock new opportunities for businesses. British companies, including Airbus and Rolls-Royce, have already announced significant business contracts in India as part of this expanding partnership. The deal also includes measures to ensure UK financial services companies have equal footing in the Indian market by binding foreign investment caps in certain sectors.
From Defence to Farmers: What PM Modi Said on Historic Free Trade Agreement
PM Modi emphasised the agreement’s potential to boost trade, create opportunities for youth and MSMEs, and deepen cultural and educational ties.
Prime Minister Narendra Modi and his British counterpart Keir Starmer highlighted the significance of the India-UK Free Trade Agreement (FTA), and outlined its wide-ranging benefits for both nations during a joint press conference.
PM Modi statement following the signing of the India-UK FTA
I would like to express my heartfelt gratitude to Prime Minister Keir Starmer for his warm welcome. Today is a historic day in our relationship. I am happy that after many years of hard work, today, the Comprehensive Economic and Trade Agreement has been concluded between the two countries.
Indian textiles, footwear, gems and jewellery, seafood and engineering goods will get better market access in the UK. New opportunities will be created in the UK market for India’s agricultural produce and processed food industry.
This agreement will prove especially beneficial for the youth, farmers, fishermen and MSME sector of India. On the other hand, UK-made products – such as medical devices and aerospace parts – will be available to the people and industry of India at accessible and affordable rates.
To give new momentum and energy to our comprehensive strategic partnership in the next decade, we will also discuss Vision 2035. This will be a roadmap for a strong, trusted and ambitious partnership in the areas of technology, defence, climate, education and people-to-people connect.
We thank Prime Minister Keir Starmer and his Government for their strong condemnation of the terrorist attack in Pahalgam. India and the UK are united in the belief that there are no double standards in the fight against terrorism.
We also agree that forces that espouse extremist ideologies should not be allowed to misuse democratic freedoms. Those who misuse democratic freedoms to undermine democracy must be held accountable.
We have been sharing views on peace and stability in the Indo-Pacific, the ongoing conflict in Ukraine and the situation in West Asia. Respecting the sovereignty and territorial integrity of all countries is imperative. The demand of today’s era is development, not expansionism.
Last month, several UK citizens were among those killed in the air crash in Ahmedabad. Our condolences to their families.
Both the countries are writing a new chapter together in the field of education. Six UK universities are opening campuses in India. Just last week, the South Hampton University campus was inaugurated in Gurugram.
For both of us, cricket is not just a game, but a passion. And also, a great metaphor for our partnership. There may be a swing and a miss at times, but we always play with a straight bat! We are committed to building a high scoring solid partnership.
