Delighted to seal historic India-UK trade deal with UK PM Starmer: PM Modi 

India and the UK have successfully concluded the ambitious and mutually beneficial free trade agreement, Prime Minister Narendra Modi said on Tuesday. In a social media post on X, PM Modi noted that both countries have formally concluded a long-anticipated Free Trade Agreement (FTA) along with a new Double Taxation Avoidance Convention. The milestone pacts mark a significant step forward in strengthening the Comprehensive Strategic Partnership between the two countries.

Described as both "ambitious and mutually beneficial," the FTA is expected to unlock fresh avenues for trade, boost bilateral investments, and drive economic growth and job creation across sectors. The agreement also lays the groundwork for enhanced collaboration in innovation and technology, aligning with both nations’ long-term development goals.  

PM Modi said: "Delighted to speak with my friend PM @Keir_Starmer. In a historic milestone, India and the UK have successfully concluded an ambitious and mutually beneficial Free Trade Agreement, along with a Double Contribution Convention. These landmark agreements will further deepen our Comprehensive Strategic Partnership, and catalyse trade, investment, growth, job creation, and innovation in both our economies. I look forward to welcoming PM Starmer to India soon."

UK PM Starmer asserted that bolstering alliances and lessening trade barriers with global economies are integral components of their Plan for Change, aimed at fostering a more resilient and secure economy.

A total of 14 rounds of negotiations were conducted between India and the UK for the Free Trade Agreement (FTA). Bilateral trade between the two countries increased from $20.36 billion in FY23 to $21.34 billion in FY24. Both nations aim to double their current $20 billion bilateral goods trade within the next decade.

Key details

Under the newly signed India–UK Free Trade Agreement, India will slash tariffs on 90% of British goods, with 85% of those products becoming fully tariff-free within a decade, according to the UK Government. The landmark deal marks a major step in boosting bilateral trade and economic cooperation.

As part of the agreement, India will halve import duties on British whisky and gin from 150% to 75%, offering a major boost to UK spirits exporters. Auto tariffs on UK-made vehicles will also be reduced to 10%, though under a specified import quota.

The UK government has projected that the agreement will lead to a 25.6 billion pound increase in bilateral trade by 2040, as well as a boost of 4.8 billion pounds in UK GDP annually by the same year.

These tariff cuts are among the most significant concessions in the trade pact and are expected to unlock new market access for British producers, while also offering Indian consumers greater choice at lower prices.

Comprehensive Strategic Partnership

The leaders hailed it as a momentous occasion in the long-standing bilateral Comprehensive Strategic Partnership, poised to enhance trade, investment, innovation, and job creation in both economies. They emphasized that the significant agreements between the two major and open market economies will create fresh avenues for businesses, fortify economic connections, and deepen people-to-people bonds.

The mutual understanding was reached that bolstering economic and commercial relations between India and the UK remains a foundational aspect of their increasingly robust and diverse partnership.

The successful conclusion of the FTA that encompasses both goods and services is anticipated to greatly boost bilateral trade, create fresh opportunities for job growth, elevate quality of life, and enhance the overall welfare of residents in both nations. Additionally, it will open up exciting possibilities for collaboration on global product and service development. The FTA is expected to strengthen the solid framework of the India-UK Comprehensive Strategic Partnership and set the stage for a future marked by increased cooperation and economic prosperity.