London/Hyderabad, July 24, 2025 (Maxim News): In a milestone development for global trade, India and the United Kingdom have officially signed a historic Free Trade Agreement (FTA) that is projected to increase annual bilateral trade by USD 34 billion. The landmark deal was inked on Thursday by Indian Prime Minister Narendra Modi and UK Prime Minister Keir Starmer during a high-level meeting at the UK’s Chequers Estate.
This is the first major trade pact signed under Prime Minister Starmer’s administration and marks a significant leap in India-UK economic relations.
Major Tariff Cuts to Benefit Key Sectors
As part of the agreement:
- India will reduce tariffs on 90% of UK products,
- While the UK will slash duties on 99% of Indian exports.
This sweeping reduction in tariff lines and regulatory barriers will benefit automobiles, beverages, cosmetics, medical devices, and engineering goods, while offering a competitive edge to Indian textiles, leather, gems and jewellery, and agricultural exports.
Prime Minister Starmer celebrated the moment on social media platform X, calling it a “major win for Britain” that will “create thousands of jobs, open new markets, and spur nationwide growth.”
Big Gains for Indian Industries
Indian exporters are expected to reap significant benefits:
- Scotch whisky, gin, and luxury UK cars will become more affordable in India.
- Indian leather products could gain a 5% additional market share in the UK within two years.
- Electronics and engineering exports from India are projected to double by 2030.
- Gems and jewellery exports, currently at USD 941 million, are forecast to double within three years.
- Zero duties on Indian textiles and leather will help compete with countries like Bangladesh and Cambodia.
Additionally, Indian agricultural goods will enjoy tariff parity with European exporters, enhancing their market access and boosting farmer incomes.
Strategic and Diplomatic Significance
This FTA marks a pivotal chapter in the India-UK Comprehensive Strategic Partnership (CSP). During their bilateral discussions, PM Modi and PM Starmer also exchanged views on:
- Regional and global challenges,
- Strategic cooperation in defence, climate action, healthcare, and education,
- Deepening technology and innovation partnerships.
Prime Minister Modi is also scheduled to call on King Charles III later in the day as part of his official engagements.
Looking Ahead
Trade analysts say the agreement could increase UK exports to India by nearly 60% in the long term. The deal sets a new benchmark in modern trade diplomacy, with both countries committing to a rules-based, inclusive, and sustainable trade framework.
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