The highly anticipated Free Trade Agreement (FTA) between the UK and India has been signed. Prime Minister Narendra Modi and his British counterpart Keir Starmer were present when the agreement was formally signed. Piyush Goyal, the Minister of Commerce, was also present at the official signing ceremony along with PM Modi. It is anticipated that trade between India and the UK will increase by US $ 34.53 billion a year.
By 2030, the FTA between the UK and India seeks to double trade to US $ 120 billion. Both nations want to boost commerce by an additional US $ 40 billion by 2040. Import duties on important export goods, such as apparel, leather goods and footwear will be eliminated.
Apparel and home textiles imported by the UK from India stood at US $ 1.4 billion in CY 2024, representing a 6.6% share of textiles imported by the UK.
With the removal of 8–12% import levies, Indian apparel and home textiles will become more affordable in the UK. This will support the expansion of exporters in apparel hubs like Ludhiana, Surat and Tirupur. It is anticipated that zero tariffs on leather and textiles will increase India’s competitiveness with neighbours in the area like Bangladesh and Cambodia. Over the following two years, it is anticipated that India’s leather industry will increase its market share in the UK by 5%.
To make trading faster and easier, both parties have decided to embrace digital technology and paperless trade. Mutual acceptance of safety and hygiene standards (SPS) is part of the agreement, which guarantees product quality and facilitates exports.
The agreement is made at a time when New Delhi is negotiating with important trading partners like the EU and the US, which is using tariff threats to demand increased market access to India.
PM Modi underscored the significance of the occasion, noting that it marked the third meeting between India and the UK within the year—a reflection, he said, of their status as natural partners. He described the day as a historic milestone in bilateral relations, highlighted by the signing of both the Free Trade Agreement (FTA) and the Double Contribution Convention.
Modi emphasised that these agreements signal the start of a new chapter in business and trade between the two nations and will establish a robust foundation for future generations in both India and the United Kingdom.
