In a historic move marking a new chapter in bilateral relations, India and the United Kingdom have successfully concluded a comprehensive Free Trade Agreement (FTA) that is set to transform trade and investment ties between the two nations. Announced jointly by Hon’ble Prime Minister of India Shri Narendra Modi and UK Prime Minister Sir Keir Starmer, this milestone agreement aligns with India’s vision of Viksit Bharat 2047 and represents a major stride toward deepening economic cooperation.

The FTA, finalised after months of intensive negotiations following the G-20 Summit in Rio de Janeiro in November 2024, was brought to fruition through close collaboration between India’s Commerce and Industry Minister Shri Piyush Goyal and the UK Secretary of State Mr. Jonathan Reynolds. With this agreement, India secures zero-duty access for nearly 99% of its exports to the UK, opening up vast opportunities for sectors such as textiles, marine products, leather, footwear, sports goods, toys, gems and jewellery, engineering goods, auto parts, and organic chemicals.

Prime Minister Modi described the agreement as a “historic milestone” that will significantly strengthen the Comprehensive Strategic Partnership between the two countries. In a social media post, he emphasised that the deal will act as a catalyst for trade, investment, innovation, job creation, and overall economic growth for both economies.

Union Minister Piyush Goyal credited the Prime Minister’s visionary leadership for positioning India as a “Vishwa Mitra” or trusted global partner. He noted that the agreement sets a new benchmark for ambitious and equitable trade between two major economies. According to Goyal, the FTA will not only benefit farmers, fishermen, workers, MSMEs, startups, and innovators but will also advance India’s integration into global value chains.

Commerce Secretary Shri Sunil Barthwal hailed the agreement as a game changer, describing it as India’s most comprehensive free trade pact to date. He noted that the FTA will serve as the “gold standard” for future trade negotiations and will accelerate India’s economic trajectory.

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A standout feature of the agreement is the three-year exemption from social security contributions in the UK for Indian employees and their employers under the Double Contribution Convention. This measure is expected to enhance the competitiveness of Indian service providers in the UK and deliver significant financial benefits.

The services sector will also see a major boost, with expanded opportunities in IT/ITeS, financial services, professional services, business services, and educational services. The agreement facilitates smoother mobility for professionals, including contractual service suppliers, business visitors, investors, intra-corporate transferees, and independent professionals such as yoga instructors and chefs.

Bilateral trade between India and the UK, currently valued at approximately USD 60 billion, is projected to double by 2030 as a result of the FTA. The agreement also addresses non-tariff barriers, enhances regulatory transparency, and promotes good governance practices, all of which will contribute to a more conducive business environment.

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