On July 24, 2025, India and the United Kingdom formally signed a landmark Free Trade Agreement (FTA) in London during Prime Minister Narendra Modi’s official visit, alongside UK Prime Minister Keir Starmer.

This occasion marks a pivotal chapter in the bilateral relationship, positioning the two nations as natural partners and ushering in a new era of economic cooperation and strategic partnership. The signing was complemented by the adoption of the “India-UK Vision 2035,” a roadmap to deepen multifaceted ties, including further cooperation in defence, education, technology, semiconductors, sustainable development, and people-to-people relationships.

Key Features of The India-UK FTA

Tariff Reductions And Market Access: The defining feature of the FTA is the provision of zero-duty access for 99% of Indian exports to the UK, substantially covering almost the entire trade value. These reforms are expected to deliver the following major benefits:

Elimination of Tariffs On Indian Products: Labour-intensive sectors such as textiles, leather, footwear, gems and jewellery, marine products, toys, engineering goods, agricultural produce, and processed foods will gain unprecedented market access in the UK. Many of these products, which previously faced UK tariffs ranging from 4% to 16%, will now compete on a more level playing field.

Indian Farmers And Fisheries: Indian agricultural and marine products—including spices, mango pulp, processed foods, shrimp, and tuna—will be able to enter the UK market duty-free, providing new opportunities for farmers and fishermen and stimulating rural livelihoods.

Enhanced Skilled Mobility: The agreement creates assured, time-bound opportunities for Indian professionals—chefs, yoga instructors, IT specialists, musicians, and intra-corporate transferees—to work temporarily in the UK, supported by relaxed visa rules and social security exemptions.

Ease For Business And MSMEs: The FTA aims to boost the “Ease of Doing Business” and reduce associated costs, particularly benefiting micro, small, and medium enterprises (MSMEs) and women-led enterprises that are central to both economies.

Benefits For The UK

Reduced Tariffs On British Goods: India will cut tariffs to as low as 3% on UK products, down from an average of 15%. Key UK exports like cars, cosmetics, whiskies, and medical devices will become cheaper in India. For example, whisky tariffs will drop from 150% to 75% immediately, going down to 40% over the next decade. Automotive tariffs will be reduced from more than 100% to 10% within quotas.

Greater Market Certainty: The agreement simplifies regulatory barriers and customs procedures, making cross-border trade swifter and more predictable for UK manufacturers, especially in sectors such as aerospace, automotive, and electrics.

Professional And Digital Services: The FTA ensures fair treatment for the UK’s financial, environmental, and construction service providers in India and includes commitments for paperless, digital trade to lower costs for businesses of all sizes.

Economic Impact And Strategic Gains

Boost To Bilateral Trade And Investment: The FTA is projected to double bilateral trade to $120 billion by 2030, a monumental rise from current levels. For the UK, government estimates forecast an annual GDP boost of £4.8 billion ($6.5 billion) and over 2,200 new jobs from increased Indian investment. British exports to India are expected to grow by 60% and bilateral trade by £25.5 billion ($34 billion) per year in the long run compared to scenarios without the deal. Indian exports to the UK will particularly benefit labour-intensive sectors, catalysing major job creation and economic empowerment for women, youth, artisans, and MSMEs.

Social And Sectoral Gains

For India: The deal empowers Indian producers to expand globally, improving competitiveness and driving “Make in India”-led export growth. Indian professionals and businesses gain more accessible entry into a major global market.

For The UK: The FTA demonstrates the UK’s post-Brexit trade independence, expanding access to one of the world’s fastest-growing economies, and bolsters critical sectors such as whisky, automotive, and finance.

Vision 2035: Comprehensive Strategic Partnership

Building on the FTA, the India-UK Vision 2035 sets ambitious targets for cooperation in:

Defence And Security: Deeper collaboration, especially in the Indo-Pacific.

Education And Skills: Joint university campuses, collaborative programs, and nurturing global talent.

Technology And Innovation: Partnerships in future telecoms, AI, critical minerals, semiconductors, quantum technologies, biotechnology, and advanced materials.

Sustainable Development: Climate action, clean energy, climate finance, and resilience-building are major pillars.

People-To-People Ties: Strengthened exchanges through easier mobility and education.

Safeguards And Exclusions

India has protected the interests of its domestic farmers by excluding sensitive items such as dairy, edible oils, oats, and apples from tariff cuts. However, 95% of Indian agriculture and processed food exports will now enjoy zero-duty access to the UK.

Conclusion

The India-UK FTA and Vision 2035 are unprecedented steps towards making the bilateral partnership broader, deeper, and future-ready. The elimination of most tariffs, commitment to regulatory cooperation, deepened people-to-people ties, and the shared drive for innovation and sustainable growth create a path for increased prosperity and strategic alignment for both nations.

Based On ANI Report