- India and the United Kingdom signed a comprehensive Free Trade Agreement (FTA) on 24th July 2025 during PM Modi’s visit to the UK.
- This pact is a major milestone in post-Brexit trade diplomacy and aims to foster mutual economic growth by removing tariffs and promoting smoother trade between the two nations.
Background:
Negotiations began in January 2022 and concluded after more than three years of talks. The FTA is being recognized as:
- India’s most ambitious bilateral trade deal, and
- The UK’s most significant trade agreement since Brexit.
Objectives:
- Eliminate duties on 99% of Indian exports to the UK.
- Promote affordable imports and access to quality goods.
- Encourage investment, innovation, and MSME growth.
- Enhance mobility of skilled professionals.
- Improve market access by reducing non-tariff barriers.
What Becomes Cheaper in India:
Scotch Whisky & Gin
- Import duties cut from 150% to 75%, and down to 40% in 10 years.
British Luxury Cars
- Tariffs slashed from over 100% to 10% under a quota-based system.
Chocolates, Biscuits & Salmon
- Lower tariffs make premium British food products more affordable.
Cosmetics & Personal Care
- Reduced tariffs benefit consumers of British beauty and hygiene brands.
Medical Devices
- Cheaper access to advanced UK-made diagnostic and medical tools.
Economic Significance:
- UK’s GDP expected to gain £4.8 billion ($6.5 billion) annually.
- Aims to double Indian exports to the UK by 2030.
- Brings direct benefits to Indian consumers, exporters, and job seekers.