LONDON, July 24: In a landmark model for international trade, Indian Prime
Minister Narendra Modi and British Prime Minister Keir Starmer signed the long-awaited
Free Trade Agreement (FTA) at Chequers, the UK Prime Minister’s official country
residence, on Thursday.
The pact, hailed as the most comprehensive trade deal, is expected to double
bilateral trade in five years.
The agreement eliminates tariffs on 99% of Indian exports to the UK, including
key sectors such as textiles, footwear, seafood, gems and jewellery, and engineering
goods. In return, British exporters will benefit from reduced duties on whisky,
automobiles, medical devices, and aerospace components. The average UK tariff
on Indian goods will drop from 15% to just 3%, significantly enhancing market
access.
“This is a historic day in our bilateral relationship,” said Modi during a
joint press conference. “The agreement will especially benefit Indian youth,
farmers, fishermen, and MSMEs. It opens new doors for our industries and strengthens
our strategic partnership,” he said.
Modi also extended an invitation to PM Starmer for a State visit to India.
Modi called the agreement "a blueprint for our shared prosperity". "On the
one hand, Indian textiles, footwear, gems and jewellery, seafood, engineering
goods will get better market access in the UK. On the other hand, people and
industries in India will be able to access products made in the UK, such as
medical devices and aerospace parts, at affordable and attractive prices," he
said.
Speaking at the signing at the UK prime minister's country residence Chequers,
Starmer said the UK-India agreement was "the biggest and most economically significant"
trade deal Britain has made since Brexit.
He said the deal will create more than 2,200 British jobs across the country
as Indian firms expand their operations in the UK.
Starmer called the FTA “a major win for Britain” and “our most economically
significant deal since Brexit.” He emphasized the pact’s potential to create
thousands of jobs across the UK and stimulate growth in advanced manufacturing,
aerospace, and technology sectors.
Industry welcomes deal
The signing ceremony was attended by senior ministers including India’s Commerce
Minister Piyush Goyal and UK Trade Secretary Jonathan Reynolds. The two leaders
also unveiled the UK-India Vision 2035, a roadmap to deepen cooperation in defence,
climate action, education, and innovation.
Industry leaders from both nations welcomed the deal. Sunil Bharti Mittal,
co-chair of the India-UK CEO Forum, called it a “modern, forward-looking partnership”
that will foster innovation and investment. Tata Steel, TVS Motor, Piramal Enterprises,
and Rolls-Royce also praised the agreement for its potential to boost manufacturing,
job creation, and technology transfer.
The FTA includes a social security provision allowing Indian companies to send
employees to the UK without double contributions, reducing costs for businesses.
It also levels the playing field for Indian agricultural exports, granting parity
with EU competitors like Germany.
With over 970 Indian companies operating in the UK and employing more than
1.1 million people, the deal is expected to further solidify economic ties and
cultural exchange.
Less levy on UK's gin and whisky
There will be less levy on UK's gin and whisky, aerospace, electricals and
medical devices, cosmetics, lamb, salmon, chocolates and biscuits, luxury cars.
Tariffs for UK exports to India will drop from 15% to 3%. Whisky tariffs have
been slashed in half, from 150% to 75%. So also Indian items like clothing and
shoes, cars, food, including frozen prawns, jewellery and gems will be cheper
in the UK.
Opponents had warned the deal could undercut British workers due to extended
social security terms.
There is also an intelligence sharing collaboration that will help in crime
detection and prevention.
Negotiations on the trade deal was started by former PM Boris Johnson in 2022.
The India-UK Free Trade Agreement sets a precedent for balanced, innovation-driven
partnerships between major economies.”