India, UK Sign Landmark Free Trade Agreement To Boost Bilateral Economic Ties

India and the United Kingdom have successfully concluded a "historic and mutually advantageous" free trade agreement (FTA), set to strengthen their Comprehensive Strategic Partnership and boost trade and investment, Prime Minister Narendra Modi announced on Tuesday following a discussion with UK PM, Keir Starmer.

According to a Hindustan Times report, the agreement was finalised three years after Modi and former UK Prime Minister Boris Johnson had initially aimed to conclude talks by October 2022.

Photo Credit: PTI

Progress had since been hampered by disagreements over issues such as tariffs on alcohol and cars, as well as political instability in the UK.

"Pleased to speak with my friend PM @KeirStarmer. In a historic development, India and the UK have successfully concluded a landmark and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention," Modi posted on X on Tuesday evening.

"These landmark agreements will further enhance our Comprehensive Strategic Partnership, and will spur trade, investment, growth, job creation, and innovation in both countries. I look forward to welcoming PM Starmer to India in the near future," he added.

The two prime ministers hailed the deal as a historic achievement that will stimulate business, innovation, and employment in both nations.

They said the agreements between the "two major open market economies" would unlock new opportunities for industry, reinforce economic ties, and strengthen people-to-people relations, according to a statement from the Indian government.

Starmer noted that "building alliances and dismantling trade barriers with global economies" forms part of the UK's "Plan for Change" aimed at creating a stronger, more resilient economy, the statement added.

More details of the agreement were expected to be released in formal announcements by both governments later on Tuesday.

The breakthrough followed two successive visits to the UK last week by India's commerce minister, Piyush Goyal, for high-level meetings with British trade secretary Jonathan Reynolds to bring the talks to a successful close.

According to the UK government's latest trade figures, India ranked as Britain's 11th largest trading partner in the four quarters ending Q4 2024, accounting for 2.4% of total UK trade.

Bilateral trade in goods and services reached £42.6 billion in that period, marking an 8.3% increase from the previous year. Indian exports to the UK were valued at £25.5 billion (up 10.1% year-on-year), while UK exports to India totalled £17.1 billion (a rise of 5.8%).