India and the United Kingdom signed a landmark Free Trade Agreement (FTA) on July 24, 2025, during Prime Minister Narendra Modi’s visit to the UK. The agreement was formalized at Chequers, the country residence of UK Prime Minister Keir Starmer, marking a significant step in post-Brexit trade relations.
The FTA reduces average import tariffs on UK goods to India from 15% to 3%, with nearly 99% of traded items receiving duty-free or reduced-tariff access. Indian exports—particularly in labour-intensive sectors like textiles, leather, gems, jewellery, and footwear—will now enjoy duty-free entry into the UK, offering massive growth potential.
Both nations have set an ambitious goal to raise bilateral trade to $120 billion by 2030. Key UK sectors such as processed foods, cosmetics, automobiles, and medical devices will gain easier access to the Indian market.
Indian professionals on short-term assignments in the UK will be exempt from paying UK social security contributions, improving savings and competitiveness. The agreement also expands cooperation in services such as IT, finance, education, engineering, and architecture.
Provisions for digital trade, cybersecurity, skill development, and mutual recognition of professional qualifications aim to strengthen youth employability and cross-border innovation.
The Securities and Exchange Board of India (SEBI) has endorsed the agreement as growth-focused, while both governments commit to regulatory transparency and business-friendly practices.
Aligned with India’s “Viksit Bharat 2047” vision, the FTA is expected to stimulate jobs, improve standards of living, and drive economic growth in both countries. It stands as the UK’s most significant trade pact since Brexit and a defining moment in India-UK strategic relations.