London – In a major milestone for India-UK economic relations, Prime Minister Narendra Modi and his British counterpart Keir Starmer signed a long-awaited Free Trade Agreement (FTA) on Thursday, expected to increase annual bilateral trade by approximately $34 billion.
Under the historic agreement, India will reduce tariffs on 90% of UK products, while the UK will eliminate duties on 99% of Indian exports. The deal significantly eases tariff barriers and regulatory procedures across multiple sectors.
“Our landmark trade deal with India is a major win for Britain. It will create thousands of jobs, open new doors for businesses, and drive growth across the UK,” said Starmer in a post on X.
The FTA is set to make imported UK goods like Scotch whisky, gin, luxury cars, cosmetics, and medical devices more affordable for Indian consumers.
On the other hand, Indian agricultural products will now enjoy tariff parity with top European exporters such as Germany. The removal of duties on textiles and leather is expected to boost India’s competitiveness against regional players like Bangladesh and Cambodia.
India’s leather industry is projected to gain an additional 5% market share in the UK over the next two years. Exports of electronics and engineering goods are forecasted to double by 2030, while gems and jewellery exports—currently valued at $941 million—are also expected to double within three years.
Officials project that UK exports to India will grow by nearly 60% over the long term due to the deal.
Earlier in the day, Prime Minister Modi met with Prime Minister Starmer at the Chequers Estate, the UK Prime Minister’s official country residence, marking the beginning of his official engagements during his fourth visit to the UK.
The two leaders are scheduled to hold comprehensive discussions covering all aspects of the India-UK bilateral relationship, as well as regional and global issues. Modi is also set to meet King Charles III later in the day.
The meeting will also review progress under the Comprehensive Strategic Partnership (CSP), with a strong focus on trade, technology, defence, climate action, health, education, and cultural ties.
With inputs from IANS