Historic Trade Milestone: India and UK Sign Landmark Free Trade Agreement to Deepen Economic Ties

Published: 24 July ‘2025. The English Chronicle Online.

In a momentous step toward deepening bilateral economic relations, India and the United Kingdom have officially signed a Free Trade Agreement (FTA) that is being hailed as a landmark accord with far-reaching implications for both economies. The signing ceremony, held at Chequers — the British Prime Minister’s official country residence — witnessed the presence of Indian Prime Minister Narendra Modi and UK Prime Minister Keir Starmer, symbolising the strategic importance both nations attach to the deal.

The agreement was formally inked by Indian Union Minister of Commerce and Industry Piyush Goyal and UK Business Secretary Jonathan Reynolds, with key figures including External Affairs Minister S. Jaishankar and UK Chancellor Rachel Reeves also attending the historic event.

The FTA, finalised after three years of intense and often complex negotiations, promises a significant uplift to trade flows between the two nations. According to official briefings, the agreement will result in the elimination of tariffs on nearly 99% of tariff lines, effectively covering almost 100% of the total trade value. Indian exports stand to benefit enormously as the deal slashes duties on a broad spectrum of goods, paving the way for comprehensive market access in the UK.

For British exporters, the FTA opens up a vast consumer market in India with reduced trade barriers. Tariffs on British goods such as cars, whisky, medical devices, soft drinks, and cosmetics — which previously stood at around 15% — will now be reduced to as low as 3%, allowing UK businesses to become more competitive in the Indian market.

“This landmark trade deal with India is a major win for Britain,” Prime Minister Keir Starmer said in an official statement. British officials underscored that the agreement will bolster opportunities for UK companies, especially small and medium enterprises, by simplifying customs procedures and eliminating many existing bureaucratic hurdles.

On the Indian side, the government emphasised that the FTA is set to significantly boost Indian exports by making its goods more affordable in the UK market. Officials noted that India will benefit from tariff elimination across product categories, thereby strengthening its global trade position and helping drive growth in manufacturing and agriculture.

The deal is expected to generate jobs, encourage investment, and foster innovation across sectors in both countries. With UK imports from India already standing at £11 billion, the liberalisation of tariffs is anticipated to substantially increase this figure in the years to come.

This FTA not only represents an economic victory for both nations but also signifies the strengthening of a long-standing partnership between two democracies bound by shared values and historic ties. It signals a new chapter in UK-India relations — one marked by mutual prosperity, trade liberalisation, and closer cooperation in the global economic arena.