London | In a landmark moment for global trade, India and the United Kingdom officially signed a historic Free Trade Agreement (FTA) on Thursday in the presence of Indian Prime Minister Narendra Modi and British Prime Minister Keir Starmer. The agreement, finalised after three years of intense negotiations, is expected to boost annual bilateral trade by approximately $34 billion, opening new avenues of economic cooperation between the two nations.
The signing ceremony took place in London, where Commerce and Industry Minister Piyush Goyal and his British counterpart Jonathan Reynolds inked the agreement. As per Indian officials, the FTA will provide tariff relief to nearly 99 percent of Indian exports to the UK, marking a major breakthrough for sectors like textiles, pharmaceuticals, gems and jewellery, and agriculture.
The agreement will also see a significant reduction in tariffs on key British exports such as whisky, automobiles, cosmetics, and medical equipment. With the FTA in place, the average tariff on many British goods exported to India will drop from around 15 percent to just 3 percent, making high-quality British products more affordable and accessible to Indian consumers.
Indian authorities highlighted that the deal ensures nearly 99 percent of product categories will enjoy full tariff exemption, representing almost 100 percent of trade value. This comprehensive coverage is set to offer unprecedented market access for Indian goods across diverse sectors, enhancing India’s global export competitiveness.
On the other hand, British officials welcomed the agreement as a major win for the UK economy. The UK currently imports goods worth £11 billion from India annually. With lowered tariffs, British consumers and companies are expected to benefit from cheaper and more diverse Indian products. In return, the deal also simplifies the process for UK businesses to export goods such as Scotch whisky and luxury cars to India.
Just hours before the formal signing, the British government released a statement describing the deal as a “huge victory” for the UK, praising the agreement for deepening economic ties with India—one of the world’s fastest-growing major economies.
British Prime Minister Keir Starmer called the agreement a milestone that will “open up exciting opportunities for British businesses and strengthen our trade relations with India.” Prime Minister Modi echoed the sentiment, stressing that the FTA marks a significant step forward in building a mutually beneficial economic partnership that reflects the aspirations of both nations.
With nearly all major goods categories set to enjoy reduced or zero tariffs, the agreement is expected to significantly enhance trade volume, encourage innovation, and provide a competitive edge to exporters on both sides. As a result, businesses in India and the UK are now preparing to explore new commercial opportunities under a modern, liberalised trade framework.
The India-UK FTA not only signals a closer economic partnership between the two nations but also underscores their shared vision of a more interconnected, prosperous, and equitable global trading system.
