PM Modi in London: Historic India–UK Free Trade Agreement Set to Transform Bilateral Relations

London, 24 July 2025 – Indian Prime Minister Narendra Modi is on a two-day state visit to London, featuring the formal signing of a landmark India–UK Free Trade Agreement (FTA). This pact is expected to significantly reshape economic ties between India and the UK under the umbrella of a Comprehensive Strategic Partnership.

PM Modi in London: Historic India–UK Free Trade Agreement Set to Transform Bilateral Relations

Key Highlights & Tariff Reductions

  • Tariff cuts:

    • UK duties on Indian exports slashed—99% duty-free, including textiles, footwear, gems & jewellery, auto components, electrical machinery, furniture, and more.

    • India will reduce or eliminate tariffs on 90% of UK goods—notably halving Scotch whisky duties from 150% to 75% immediately, with further reductions to 40% over 10 years; automobile tariffs drop to 10% under quota systems.

  • Economic boost:

    • The agreement is projected to double bilateral trade to $120 billion by 2030, and increase cumulative trade by £25.5 billion by 2040.

    • UK GDP is expected to rise by £4.8 billion annually.


Services, Mobility & Procurement Gains

  • Professionals & Social Security:

    • Indian professionals (ITC, chefs, yoga instructors, etc.) gain enhanced mobility and a 3‑year waiver on UK National Insurance contributions, potentially saving ₹4,000 crore (~US $463 million).

  • Public procurement:

    • UK companies can bid for Indian government contracts over ₹2 billion (≈£38 billion annually)

Diplomatic & Strategic Context

  • High-level meetings:

    • PM Modi is scheduled to meet UK PM Keir Starmer at Chequers, followed by a royal audience with King Charles III.

  • Strategic agenda:

    • Talks will encompass trade, health, education, defence, technology, and climate across the Comprehensive Strategic Partnership framework.

  • Next steps:

    • The deal, signed by Modi and Starmer, is awaiting ratification by the British Parliament and India’s cabinet, expected to be completed within approximately a year.

Sectoral Winners & Strategic Outlook

  • Booster for Indian exporters:

    • Sectors such as textiles, leather, pharma, engineering goods, marine products, and gems & jewellery will receive major boosts.

    • Companies like Welspun, Arvind, Bata, Relaxo, Tata Motors, and Bharat Forge stand to gain direct market access.

  • UK advantages:

    • Scotch whisky, UK-made cars (e.g., Jaguar Land Rover, Aston Martin), cosmetics, medical devices, and salmon will benefit from tariff relief.

  • Critiques:

    • Chatham House has called for a broader Indo‑Pacific strategy, suggesting the FTA alone isn’t “transformative".