The ambitious agreement promises to boost bilateral trade, investments, job creation, and innovation across both economies, marking a new phase in the India-UK strategic partnership.
May 6, 2025: In a major diplomatic and economic breakthrough, India and the United Kingdom on Tuesday concluded a long-awaited Free Trade Agreement (FTA), with Prime Minister Narendra Modi calling it a “historic milestone” that will catalyse trade and deepen the comprehensive strategic partnership between the two nations.
The FTA, finalized after three years of complex negotiations and a nine-month pause, was announced following a phone conversation between PM Modi and his British counterpart, Prime Minister Keir Starmer.
“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,” PM Modi posted on X (formerly Twitter).
The leaders hailed the deal as a transformative step for both economies, promising enhanced trade, job creation, technological innovation, and stronger economic linkages. Starmer noted the agreement aligns with the UK’s “Plan for Change,” aimed at building stronger alliances and reducing global trade barriers.
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What the Deal Means:
- Enhanced bilateral trade: Total India-UK trade in goods and services reached £42.6 billion by end of Q4 2024, up 8.3% YoY.
- Exports growth: India exported £25.5 billion worth to the UK (up 10.1%), while UK exports to India stood at £17.1 billion (up 5.8%).
- Stronger economic cooperation: Includes a Double Contribution Convention to streamline taxation and social security issues.
- Job creation & innovation: Expected to generate new opportunities in sectors like technology, manufacturing, services, and education.
Road to the Deal:
Talks began under former British PM Boris Johnson with an initial target set for October 2022. Negotiations faced delays due to tariff disputes (particularly on alcohol and automobiles), legal technicalities, and political instability in the UK. However, renewed momentum came after two high-level visits by India’s commerce minister Piyush Goyal to the UK last week.
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Formal documents and implementation plans are expected to be released shortly by both governments.
Tags: India-UK FTA, Modi Starmer Trade Deal, India UK Relations, Free Trade Agreement 2025, Indo-British Diplomacy, Global Trade, Keir Starmer, Piyush Goyal