India and the UK Sign Landmark Free Trade Agreement Aimed at Boosting Bilateral Trade by $34 Billion

London, July 24 — In a historic move, India and the United Kingdom have signed a landmark Free Trade Agreement (FTA) on Thursday, aimed at enhancing bilateral trade and investment by lowering tariffs on a wide range of goods, including British whisky, cars, and consumer products.

The agreement was signed by India’s Commerce Minister Piyush Goyal and the UK’s Business and Trade Secretary Jonathan Reynolds, in the presence of both Prime Minister Narendra Modi and UK Prime Minister Keir Starmer.

“Today is a historic day in India-UK relations… After many years of hard work, a comprehensive economic and trade agreement has been inked between India and the UK,” PM Modi said on the signing of the agreement.

Major Highlights of the India-UK FTA

Indian officials have stated that the FTA is expected to benefit 99 percent of Indian exports by providing tariff-free access and broad market coverage across sectors. Indian exporters will have nearly a 100 percent elimination of tariffs, accounting for approximately 99 percent of tariff lines and almost 100 percent of trade value.

For the UK, the agreement will provide better access for British products in India, with average tariffs on products such as whisky, automobiles, cosmetics, soft drinks, and medical devices reduced from 15% to 3%.

Trade Boost and Economic Impact

The FTA is expected to increase bilateral trade by approximately USD 34 billion annually, marking a substantial step forward in the economic relations between the two countries. Thousands of goods, which the UK currently imports from India, have a value of £11 billion, and will soon be available to British consumers and businesses at a more competitive and affordable price, thanks to the new tariff relaxations.

British Prime Minister Keir Starmer has regarded the deal as a “major win for Britain” because it has the potential to deepen economic ties and promote broader possibilities for British businesses to engage in India’s emerging market.

Years in the Making

The agreement comes on the heels of three years of intense talks and is seen as a significant development in India’s more expansive trade agenda. Indian officials stated that this FTA guaranteed substantial elimination of tariffs but secured comprehensive access for Indian goods across all sectors.

The agreement is part of India’s long-term strategy to establish new trade relationships and strengthen its position in global trade. The UK views this as a key opportunity post-Brexit to improve its economic ties to Asia, as it is anticipated to increase bilateral trade by around £25.5 billion (approximately USD 34 billion) per year.

What It Means for Consumers and Businesses

• They will now find it easier to access the UK market, increasing the potential for export opportunities in the textiles, pharmaceutical, automotive components, and electronics sectors, among others.
• Indian exporters will face fewer barriers in one of the world’s fastest-growing economies and will find new opportunities through trade, primarily in premium consumer goods.
• Consumers in both countries will enjoy more variety, prices will become more competitive, and product availability will improve.

With the FTA, India and the UK are entering a new era of economic collaboration, benefiting from new opportunities and ultimately strengthening their strategic partnership.

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