During Prime Minister Narendra Modi’s official visit to London, UK Prime Minister Keir Starmer and India inked a historic Free Trade Agreement (FTA) on July 24, 2025.
This event ushers in a new age of economic cooperation and strategic partnership, establishing the two countries as natural allies and marking a turning point in the bilateral relationship. The “India-UK Vision 2035,” a roadmap to strengthen a variety of links, including more cooperation in defense, education, technology, semiconductors, sustainable development, and people-to-people contacts, was adopted in conjunction with the signing.
Zero-duty access for 99 percent of Indian exports to the UK, which covers nearly the whole trade value, is the FTA’s defining characteristic. The following significant advantages are anticipated from these reforms:
In the UK, labor-intensive industries like textiles, leather, footwear, jewelry and gems, toys, engineering items, marine products, agricultural commodities, and processed meals will have unparalleled access to markets. Previously subject to UK tariffs ranging from 4% to 16%, many of these products will now be able to compete on an even playing field.
Spices, mango pulp, processed foods, shrimp, and tuna are just a few of the Indian agricultural and marine products that will be able to enter the UK market duty-free, opening up new markets for farmers and fishermen and boosting rural livelihoods.
With the help of loosened visa regulations and social security exemptions, the agreement provides guaranteed, time-bound chances for Indian professionals, including chefs, yoga instructors, IT specialists, musicians, and intra-corporate transferees, to work temporarily in the UK.
Micro, small, and medium-sized businesses (MSMEs) and women-led businesses, which are essential to both economies, stand to gain the most from the FTA’s increased “Ease of Doing Business” and decreased related costs.
For UK businesses, particularly those in industries like aircraft, automotive, and electrics, the deal streamlines regulatory obstacles and customs processes, resulting in faster and more predictable cross-border commerce.
The FTA includes pledges for paperless, digital trade to reduce costs for companies of all sizes and guarantees equitable treatment for UK financial, environmental, and construction service providers in India.
By 2030, it is anticipated that the FTA would have doubled bilateral trade to $120 billion, a significant increase above present levels. According to government estimates, the UK’s GDP will grow by £4.8 billion ($6.5 billion) annually, and more than 2,200 new jobs will be created by
greater investment from India. In comparison to scenarios without the agreement, it is anticipated that bilateral trade will increase by $25.5 billion ($34 billion) annually and British exports to India will increase by 60% over the long term. In particular, labor-intensive industries will gain from Indian exports to the UK, which will spur significant employment growth and economic development for women, young people, craftsmen, and MSMEs.
The agreement increases competitiveness and propels “Make in India”-led export growth by enabling Indian producers to grow internationally. Businesses and professionals in India have easier access to a significant international market.
The FTA strengthens vital industries including whiskey, automotive, and banking and shows the UK’s post-Brexit trade independence by increasing access to one of the fastest-growing economies in the world.
collaborations in innovative materials, quantum technologies, semiconductors, key minerals, biotechnology, AI, and future telecommunications.
By excluding delicate goods like dairy, edible oils, oats, and apples from tariff reductions, India has safeguarded the interests of its own farmers. But now, 95% of India’s agricultural and processed food exports will be able to enter the UK duty-free.
Unprecedented measures to expand, strengthen, and prepare the bilateral relationship for the future are the India-UK Free Trade Agreement and Vision 2035. A route to greater prosperity and strategic alignment for both countries is created by the removal of the majority of tariffs, a dedication to regulatory cooperation, strengthened people-to-people relations, and a shared desire for innovation and sustainable growth.
