London| July,24: India and the UK on Thursday signed a landmark Free Trade Agreement (FTA), which is expected to boost bilateral trade by USD 34 billion annually. This is the largest agreement the UK has signed with a country since leaving the European Union in 2020.
The deal was signed between Commerce Minister Piyush Goyal and the UK’s Secretary of State for Business and Trade, Jonathan Reynolds. The signing of the agreement came following bilateral talks between PM Modi and his British counterpart Keir Starmer in London.
Addressing a joint press conference with Starmer by his side, PM Modi, who is on a two-day visit to the UK, said the FTA was a blueprint for India and the UK’s shared prosperity. The deal is expected to boost bilateral trade by USD 34 billion annually.
“Today marks a historic day in our relations. I am delighted that after the hard work of several years, today our two nations have signed the Comprehensive Economic and Trade Agreement,” he said.
“On one hand, Indian textiles, footwear, gems and jewellery, seafood and engineering goods will get better market access in the UK. New opportunities will emerge in the UK market for India’s agricultural produce and processed food industry. This agreement will especially benefit Indian youngsters, farmers, fishermen and the MSME sector,” he said.
PM Modi said the people and industries in India will be able to access UK-made products, such as medical devices and aerospace parts, at affordable and competitive prices. On his part, Starmer said the FTA will bring “huge benefits” to India and the UK.
“It is a deal that will bring huge benefits to both of our countries, boosting wages, raising living standards and putting more money in the pockets of working people. It is good for jobs, it is good for business, cutting tariffs and making trade cheaper, quicker and easier,” he said.
“This is the biggest and economically most significant trade deal the UK has made since leaving the EU. It is one of the comprehensive trade deals that India has ever done,” he added.
Starmer said with the signing of the FTA with India, the UK was sending a powerful message that the UK was open for business amid global uncertainties over US President Donald Trump’s sweeping reciprocal tariffs.
The FTA is India’s first major bilateral trade deal with a developed country in over 10 years. It is also the most important trade deal the UK has signed since the country voted to leave the EU in 2016 and officially left the bloc in 2020.
In a tweet, Starmer called the FTA a “landmark deal” and said the agreement will boost the creation of jobs and business opportunities in the UK.
“A landmark deal with India means jobs, investment and growth here in the UK. It creates thousands of British jobs, unlocks new opportunities for businesses and puts money in the pockets of working people. That’s our Plan for Change in action,” he wrote on X.
The FTA aims to remove or reduce tariffs on a wide range of goods and services. For India, this includes better access for labour-intensive exports such as leather, textiles, clothing and footwear. For the UK, it means cheaper imports of goods like whisky and cars.
According to officials, 99 per cent of Indian products will get duty-free access to the UK market under the agreement, which covers almost all of India’s current exports to the UK. Both countries aim to double their trade value to USD 120 billion by 2030 with the help of this agreement.
Besides easing tariffs, the deal also includes a social security agreement. It will allow Indian companies to send employees to the UK without having to make double social security contributions, saving costs for businesses.
The UK is India’s sixth-largest investor, with total investments of around USD 36 billion. Nearly 1,000 Indian companies operate in the UK, employing over 1,00,000 people and investing about USD 2 billion.
India’s exports to the UK rose 12.6 per cent to USD 14.5 billion in 2024-25, while imports grew 2.3 per cent to USD 8.6 billion during the same period. Bilateral trade between the two countries rose to USD 21.34 billion in 2023-24 from USD 20.36 billion in the previous year.
