Prime Minister Narendra Modi and UK Prime Minister Keir Starmer have hailed the successful conclusion of the India–UK Free Trade Agreement (FTA) as a historic and transformative milestone in the bilateral relationship. The landmark deal, described by both leaders as ambitious and mutually beneficial, is poised to significantly boost trade, investment, and job creation across both economies.
Under the terms of the agreement, 99% of Indian exports to the UK will now benefit from zero-duty access, opening up substantial new opportunities for India’s labour-intensive sectors. Key beneficiaries include textiles, marine products, leather goods, footwear, sports equipment, toys, gems and jewellery, as well as engineering goods, auto parts, and organic chemicals.
On the UK side, the deal grants British businesses access to India’s expansive public procurement market, which spans goods, services, and construction. This is expected to create new openings for the UK’s transport, healthcare, and energy sectors. India will also gradually eliminate duties on 90% of British exports, including whisky, medical devices, machinery, and lamb, with 85% of these goods becoming tariff-free over the next ten years.
Notably absent from the agreement is any reference to the UK’s Carbon Border Adjustment Mechanism (CBAM), a policy set to impose carbon-linked import tariffs. India had earlier voiced its concerns and requested an exemption, warning that any imposition of carbon taxes could prompt reciprocal action.
Both Prime Ministers emphasised that the agreement strengthens the India–UK Comprehensive Strategic Partnership, underlining their commitment to deeper economic engagement, innovation, and shared prosperity. “This is a historic step forward that will create new jobs, enhance living standards, and strengthen the economic and cultural ties between our nations,” said Modi.
Starmer echoed the sentiment, adding, “Reducing trade barriers and forging stronger global partnerships is central to our Plan for Change and a stronger, more secure UK economy.”
The FTA, which covers goods and services, is expected to expand bilateral trade significantly, create new employment opportunities, and enable joint development of products and services for global markets. It marks a pivotal chapter in India–UK relations, setting the stage for enhanced cooperation in the years ahead.
Modi also extended an invitation to Starmer to visit India, with both leaders agreeing to remain in close contact as they work to implement the agreement and explore further areas of collaboration.
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